Ar 2013

Global Yakult
Entering a New Growth Stage

Annual Report 2013
Year ended March 31, 2013
Growing From
Our Roots
Our founder,
Dr. Minoru Shirota, successfully strengthened and

cultivated Lactobacillus casei strain Shirota while
working in a microbiology laboratory at Kyoto Imperial
University School of Medicine (now Kyoto University). In
1935, he began sales of a fermented milk drink under the
brand name Yakult.
Contents
01
The Sources of Yakults Strength
02
Yakult Consumption around the World /

Financial Highlights
04
Message from the Chairman and President
06
Interview with the Chairman and President
10
Special Feature:
Global YakultEntering a New Growth Stage
14
Review of Operations
20
Research & Development
22
CSR Activities
24
Corporate Governance
27
Board of Directors and

Audit & Supervisory Board Members
28
Financial Section
54
Global Network
55
Corporate Data
Forward-Looking Statements
Statements contained in the Annual Report 2013 regarding
business results for fiscal 2013 represent judgments based on
currently available information. It should be noted that there is a
possibility that actual results could differ significantly from those
anticipated due to such factors as exchange rate fluctuations.
In the more than 75 years

since then,
Yakult has conducted its business activities around
the world in ways based on Dr. Shirotas philosophy
Shirota-ism (preventive medicine, the link between
a healthy intestinal tract and a long life, and offering
products at a price affordable to everyone)as explained
on the next page.
As a Probiotics* pioneer,
we help to protect peoples health in 32 countries and
regions, including Japan. In addition to fermented
milk drinks, Yakult operations in Japan today include
a pharmaceuticals business, in which we handle an
anticancer drug widely used worldwide, as well as a
cosmetics business.
* Probiotics: Live microorganisms that provide health benefits

by improving the balance of intestinal flora.
Preventive
medicine
A healthy
intestinal
tract leads to Shirota-ism
a long life
The Sources of Yakults Strength
A price
anyone can
afford
Yakult has three unique sources of strength:
Products Power:
Products
Power
More than 75 Years of a Global Classic

Since its founding more than 75 years ago, Yakult has been
a pioneer in the field of Probiotics, delivering products that
contribute to good health. Today, Yakult has expanded beyond food
and beverages to play an active part in the pharmaceuticals and
cosmetics businesses as well.
The Yakult Lady System:

Sales
Power
Everywhere Is Local
Yakult supplies its products via two sales channels: home delivery sales by Yakult Ladies, and retail sales
via high-volume retailers, vending machines, and other points of sale. Together, these two channels are
better than one, creating synergies that underpin Yakults powerful sales capabilities.
Our unique home delivery system offers opportunities to meet customers face-to-face and explain to them
how lactobacilli work to support good health. It also enables customers to experience for themselves the
benefits of Yakult products.
Dynamic R&D:
R&D
Power
The Wellspring of Future Competitiveness

For Yakult, R&D activities vitally underpin its ability to create products that promote
good health today and in the future. The R&D Division pursues fundamental
research in life science aimed at developing and applying basic materials in food,
pharmaceuticals, cosmetics and other areas.
Lactobacillus casei strain Shirota
ANNUAL REPORT 2013
01
YAKULT HONSHA CO., LTD.
Bifidobacterium breve strain Yakult
Taking Good Health

akult Consumption around the World
Belgium*
United Kingdom*
219
68
(Thousands of bottles/day)
United States*
162 (Thousands of bottles/day)
EUROPE
T H E AM E RIC AS
Mexico*
3,337
Brazil*
Financial Highlights
YAKULT HONSHA CO., LTD. and its consolidated subsidiaries
March 31, 2013, 2012, 2011, 2010 and 2009
2009
For the year:
Net sales
Operating income
Net income
At the year-end:
Total assets
Total liabilities
Total equity
Financial ratio:
Return on equity (ROE) (%)
Thousands of
U.S. dollars
(Note 2)
Millions of yen
2010
2011
2013
2012
2013
293,490
16,744
11,325
290,678
18,991
13,249
305,944
20,401
13,169
312,553
20,817
13,292
319,193 $3,432,184
23,068
248,045
16,379
176,120
361,902
134,936
226,966
389,892
140,970
248,922
392,828
141,857
250,971
397,214
144,971
252,243
438,176 $4,711,568
151,077 1,624,486
287,099 3,087,082
5.1
6.2
5.9
5.8
6.7
U.S. dollars
(Note 2)
Yen
Per share of common stock:

Basic net income
Total equity (Note 3)
Cash dividends applicable to the year
65.75
1,195.60
20.00
77.11
1,300.21
20.00
1,847
76.55
1,313.37
22.00
77.32
1,328.61
22.00
95.03 $
1,517.88
23.00
02
30,696
30,000
25,099
26,395
27,494
28,698
20,000
10,000
1.02
16.32
0.25
Notes: 1. Figures are rounded to the nearest million.

2. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan
and has been made at the rate of 93 to U.S.$1, the approximate rate of exchange at March 31, 2013.

3. Minority interests are not included in equity on process of calculation.
ANNUAL REPORT 2013
Sales Volume by Region in 2013
FY 09
10
11
12
13
The Americas Asia and Oceania Europe Japan
Global
Net Sales and Operating Margin

(Billions of yen)
The Netherlands*
210
South Korea
China (total)
Germany
4,170
2,911
Breakdown is as follows:
Guangzhou 1,378
Shanghai 413
Beijing 210
China 911
87
Austria
Italy
Japan
India
8,877
Taiwan
74
933
Hong Kong
540
The Philippines
Thailand
1,502
2,146
Vietnam
A SI A A ND O C E AN IA
Malaysia
225
Singapore*
215
10.0
400
10.0
400
300
10.0
7.5
300
7.5
300
200
7.5
5.0
200
5.0
200
100
5.0
2.5
100
2.5
100
0
2.5
0
FY 09
10
11
0 Net sales (left scale)
FY 09 margin 10
(right scale)11
Operating
0 Net sales (left scale)
FY
09
10
Operating margin (right scale)11
Net sales (left scale)
Operating margin (right scale)
15
77
(%)
400
108
Indonesia
12
13
12
13
12
13
Net
Income and Net Income per Share (Basic)
100
20
(Billions of yen)
(Yen)
100
20
100
75
20
15
15
75
15
10
75
50
10
50
10
5
50
25
25
5
0
25
0
FY 09
10
11
12
0 Net income (left scale)
FYincome
09 per share
10 (basic) (right
11 scale) 12
Net
0 Net income (left scale)
FY
09
10
11
Net income per share (basic) (right scale)12
Net income (left scale)
Net income per share (basic) (right scale)
13
13
13
10.0
ROE
10.0
(%)
2,744
8.0
10.0
8.0
6.0
8.0
6.0
4.0
6.0
4.0
2.0
4.0
Australia*
2.0
214
2.00
0
* The sales of bottles for the following countries are included: Uruguay (Brazil), Belize (Mexico), Canada (the United States),
Luxembourg (Belgium), France (the Netherlands), Spain (the Netherlands), Ireland (the United Kingdom), Brunei (Singapore),
and New Zealand (Australia).
ANNUAL REPORT 2013
03
0
0
FY 09
10
11
12
FY 09
10
11
12
13
FY 09
10
11
12
13
13
0
0
essage from the Chairman and President
Takashige Negishi
President and Representative Director
Chief Operating Officer (COO)
Sumiya Hori
Chairman and Representative Director
Chief Executive Officer (CEO)
ANNUAL REPORT 2013
04
Opening the door to a new stage for growth

and aiming for the next leap forward
The Yakult World Convention was held in November 2012 in Kobe. Symbolic of Yakults globalization, outstanding Yakult Ladies from
both Japan and overseas attended the convention. At this highly productive gathering, we succeeded in sharing with the participants the
passionate spirit of Yakults foundation as well as the bonds and sense of unity of the Group.

Yakult advanced overseas for the first time in 1964, when it established operations in Taiwan. Since then, regular consumption of Yakult
products has been expanding steadily in Asia, the Americas and Europe, and as of August 2013 we have operations in 32 countries and
regions, including Japan, with an annual average sales volume of dairy products totaling 30.7 million bottles per day. This is the first time
since Yakults establishment that the sales volume has exceeded 30 million bottles.

The dream of our founder, Dr. Minoru Shirota, was delivering good health to people around the world, and his dream is steadily
becoming a reality. We are delighted that the core value of our existence as a company entrusted with social responsibility has
been enhanced.

To deal with the new changing times to come, we would like to propose a lifestyle in which Yakult is consumed at all times, in all places
and in all situations so that Yakult continues to be a company that is useful not only for people but also for society. As an example, we
embarked on a space project called Yakult Space Discovery and have been conducting a range of research to contribute to human health
even in the coming space age.

With respect to the current status of Yakult, against the backdrop of the dramatic expansion and steady business performance overseas
described earlier, we have high hopes, expecting new growth. Going forward, the business environment is expected to undergo drastic
changes on a global level. Nonetheless, we aim to ensure sustained growth by continuing to adhere to our principles and roots, which
represent the value of our existence as a company.

We look forward to showing Yakults growth as it takes a new step forward.
August 2013
Sumiya Hori
Takashige Negishi

Chief Executive Officer (CEO)

Chief Operating Officer (COO)
ANNUAL REPORT 2013
05
Opening the door

to a new stage for
growth Q
nterview with the Chairman and President
Reflecting on the Fiscal Year Ended March 31, 2013
With a dramatic expansion

and steady business performance overseas, Yakult
has opened the door to a
new stage for growth. We
have asked top management about questions that
are currently asked most
frequently, such as those
regarding strategies for
future growth.
Please summarize the business results for the fiscal year

ended March 31, 2013.
We recorded record-high net sales, while profits also grew significantly.
Although the business environment fluctuated

wildly both in Japan and overseas during the year
under review, we worked to build awareness and
understanding of Probiotics, which constitutes
the bedrock of our operations, while striving to
communicate the superiority of our products. In
addition, we sought to boost performance by taking
steps to shore up our sales organization, research and
develop new products, upgrade our production facilities,
and vigorously enhance our overseas operations and
pharmaceuticals business.
As a result, our consolidated net sales in the fiscal
year ended March 31, 2013 reached 319.2 billion
(up 2.1% compared with the previous year), our best
ANNUAL REPORT 2013
06
performance to date. In terms of profits, we recorded

operating income of 23.1 billion (up 10.8%) and
net income for the year of 16.4 billion (up 23.2%),
thus achieving increases in revenues and income.
Furthermore, total global annual average sales of Yakult
and other fermented milk products grew to 30.7 million
bottles per day, marking the first time that more than 30
million bottles were sold per day since the Companys
foundation.
With regard to business performance during the year
under review by segment, in the Food and Beverages
business, we achieved growth in revenues thanks to
the expanded sales volume of dairy products. However,
we recorded a slight decrease in profits because of an
increase in depreciation and amortization and a rise in

costs of raw materials caused by the start of operations
at the Hyogo Miki Plant. In our international business,
sales volume of dairy products rose significantly
throughout Asia, resulting in increases in revenues and
Q
A
income. In the pharmaceuticals business, despite a

growth in sales volume, especially that of Elplat, a drug
for the treatment of colon cancer, both revenues and
income declined due to the large impact of the NHI
price revision.
The Prospect for Business Management (1)
Please discuss measures being taken in the Food and

Beverages business.
We will maintain a growth trend in Japan and accelerate growth in the
overseas market which has a large potential for expansion.
Let us speak first about the domestic food and

beverages business.
Since fiscal 2007, the sales volume of dairy
products in Japan has been increasing each year, albeit
gradually, except in fiscal 2010, when the Great East
Japan Earthquake occurred. The driving force behind
this is the Yakult Ladies, who are active in the home
delivery channel. In sales activities, the Yakult Ladies
meet directly with customers to convey and promote
understanding of the health value of Lactobacillus
casei strain Shirota. We call these value dissemination
activities. Each sales company in Japan has a deep
understanding of these activities and practices them
while improving the structures and systems for the
activities. Furthermore, in our retail store channel,
promotion staff at retail stores also actively implement
value dissemination activities.
In the home delivery channel during the fiscal year
ending March 31, 2014, we will focus on sales of the
Yakult 400 series as priority products, aiming to increase
the Yakult Ladies incomes as well as to reform the
business structures of sales companies. In the retail

store channel, we will implement sales activities with
clear targets and promotional points, promoting Yakult
Ace, which has been on the market since March 2013,
as a priority product. Furthermore, the retail sales
ratio of the drinkable yogurt brand Joie series, which
we renewed during the fiscal year under review, is
40%. We aim to maintain its fresh appeal while mainly
promoting products featuring flavors offered for a
limited time only.
As a new product, we launched Nyusankin soy ,
a fermented soy drink containing Lactobacillus casei
strain Shirota offering evidence-based health benefits,
in May 2013. Sales are limited to Okinawa and the
northern part of the Tokyo metropolitan area, but we
plan to gradually expand our sales territories. In the
future, we intend to develop this first collaboration of
soymilk, which has been attracting worldwide attention,
and Lactobacillus casei strain Shirota on a large scale.
We would now like to discuss our international food
and beverages business.
ANNUAL REPORT 2013
07
The annual average number of bottles sold overseas

per day was a record-high 21.82 million bottles, an
increase of 1.8 million bottles (9.0%) compared with the
previous year. We will continue to further cultivate and
expand sales areas while promoting the reinforcement of
our production system.
Among the major countries into which we have
already entered, we will discuss the situation in China
and Mexico. For Indonesia and Brazil, please see the
special feature on pages 10 13.
First, in China, the annual average number of bottles
per day was 2.91 million bottles, an increase of 26.1%
compared with the previous year, showing that the
ongoing cultivation and expansion of the market has
been steady. With a goal of 27 sales bases by 2015, we
have established three new sales bases in Chengdu,
Chongqing and Zhengzhou since January 2013.
Currently, we have a total of 24 sales bases in China.
Furthermore, we are building Yakults second plant in
Guangzhou and Yakults second factory building in
Tianjin as part of measures to reinforce our production
system. By 2014, we plan to construct a system
capable of producing approximately 7.0 million bottles
per day to meet the robust sales demand within China.
As for Mexico, although its economic environment
remained harsh, we achieved a good start with the
number of bottles sold during the first quarter in the
fiscal year ending March 31, 2014 rising 3.3% from
the previous fiscal year. This largely reflected a steady
increase in the number of Yakult Ladies in the home
delivery channel as well as in the number of retail
stores to which we deliver our products, together with
thorough promotion of the health benefits offered by
Lactobacillus casei strain Shirota. In addition to the
steady expansion in the number of bottles sold, a rise in
the unit price through a price increase also contributed
to our performance. We hope to maintain this growth
trend in the future.
Q
A
The Prospect for Business Management (2)
Could you discuss recent initiatives undertaken in the

pharmaceuticals business?
We have been concentrating business resources in the field of
anticancer drugs, Elplat in particular, to improve earnings capacity.
The core product of our pharmaceuticals business, Elplat,

is highly rated as a key drug for the treatment of advanced
or recurrent colorectal cancer and for the adjuvant
treatment of colon cancer in patients who have undergone
complete resection of the primary cancer. During the fiscal
year under review, we faced difficult conditions due to a
15% reduction in pharmaceuticals prices, which started
in April 2012 because of repricing for market expansion.
However, since the use of Elplat in medical practice is
rising, we plan to boost sales volume in the future.
To be specific, in adjuvant therapy in patients with

colon cancer, we will continue to strive to achieve a
40% share among 24,000 target patients. In particular,
in Stage IIIB with the largest number of patients where
potent adjuvant treatment has not been standardized,
we will work hard to make adjuvant treatment using
Elplat a standard therapy. To accomplish this, we will
not only reinforce sales promotion through MRs but
also promote understanding of adjuvant treatment for
patients by offering educational activities to the public
Q
A
through public lectures. Moreover, although Elplat

already has won a share of more than 70% as the
first-line drug (primary chemotherapy) for advanced or
recurrent colorectal cancer, we now face a challenge
where the treatment courses have decreased. We will
strive to gradually improve the treatment courses by
thoroughly implementing measures to deal with side
effects. We will apply for further expansion of indications
of Elplat for pancreatic cancer in the first quarter of the
fiscal year ending March 31, 2014 as well as for gastric
cancer in the second quarter.
To boost sales of drugs other than Elplat, our
marketing will continue to focus on the oncological field,
including actions to capture a greater share for cancer
chemotherapeutic agent Campto in Japan and to
increase marketing channels for a nucleoside metabolic
inhibitor that exhibits antitumor activity, Gemcitabine
Yakult. Outside Japan, we will continue to further
differentiate Campto from its generic drugs.
Corporate Social Responsibility
Please tell us about Yakults major activities aimed at

achieving a sustainable society.
We are working mainly through Yakult Sustainable Ecology 2020,
which was implemented in April 2012.
We established the Yakult Basic Policy on the

Environment in June 1997, which encompasses the
entire Group. Guided by the environmental philosophy and
directives for action constituting this policy, we promote
environmental protection activities in every aspect of our
business operations.
ANNUAL REPORT 2013
08
Recognizing the need to continuously implement these

activities in tandem with business operations, in March
2004 we sought to transform all of our Group companies
in Japan into green companies by 2010. In this way,
we established the Yakult Eco Vision 2010, which aims
to realize coexistence with the global environment and
Yakult Sustainable Ecology 2020
Realization of a low-carbon society

Efficient use of resources

Efforts to preserve biodiversity

Creation of a sustainable society

the formation of a sustainable society and has achieved
successful results. This was followed by the establishment
of Yakult Sustainable Ecology 2020 in April 2012,
covering the period through the target year of 2020. While
describing the future of the Company in specific terms
according to the three aspects of realization of a lowcarbon society, promotion of efficient use of resources
and preservation of biodiversity, this program aims to form
a sustainable society in harmony with our stakeholders.
During the fiscal year ended March 31, 2013, Yakult
continued its initiatives from the previous year, continuing
to introduce renewable energy with solar power generation
and other forms, implementing greenhouse gas reduction
efforts at dairy product plants and in logistics operations,
striving to achieve zero waste emissions, and promoting
fuel conversion. All of these initiatives attained successful
results. In addition, Yakult strengthened activities such as
the introduction of a program of forest conservation activity.
Furthermore, each year since the fiscal year ended
March 31, 1995, the entire Yakult Group has conducted
the Yakult Environmental Protection Campaign as part
of environmental education. More than 130,000 people
have participated since the programs inception, and
the Company has had a considerable effect in steadily
increasing environmental consciousness and social
contributions among Yakult Group employees.
Q
A
Business Forecast and Returns to Shareholders
What is your message for Yakult investors with regard to

the business forecast for the fiscal year ending March 31,
2014 and shareholder returns, among others?
We will meet shareholders expectations through significant
improvements in profitability and dividend increases.
For the fiscal year ending March 31, 2014, on a

consolidated basis, we anticipate net sales of 355.0
billion (up 11.2%), operating income of 29 billion (up
25.7%) and net income of 20 billion (up 22.1%). We
expect to see steady sales in all segments, especially in
our overseas business, anticipating a significant recordsetting rise in net sales and profits due to the significant
positive effects of the lower yen on the exchange rate.
With respect to the annual dividend for the fiscal year
ended March 31, 2013, we set an annual dividend of
23.0 per share, an increase of 1.0 from the previous
year, to return profits to shareholders. Since we had
already paid an interim dividend of 11.5, the dividend
paid at the end of the fiscal year ended March 31, 2013
was 11.5. In the fiscal year ending March 31, 2014,
we plan to pay an annual dividend of 24.0 per share,
an increase of 1.0 from the year under review, as we
continue to return profits to shareholders.
ANNUAL REPORT 2013
09
Lastly, against the backdrop of a dramatic

expansion and steady business performance
overseas, the Yakult Group has opened the door
to a new stage for growth and taken a new step
forward. In the future, we will continue to propose
a lifestyle in which Yakult is consumed anytime,
anywhere and in all situations so that Yakult
continues to be a company that is useful not only
for people but also for society, striving to further
enhance our corporate value.
We ask our shareholders and investors for their
continued support and understanding.
SGlobal YakultEntering
pecial Feature
Entering a New Growth Stage

Yakult launched overseas operations in 1964. Today, Yakult is consumed daily by more than 20 million people around the world in 31
countries and regions, excluding Japan, and the Company has entered a new stage of growth. In this annual report, we highlight our
strategy for international operations and feature Indonesia and Brazil, two countries where further growth is expected in the future.
10
a New Growth Stage

Our Global Strategy
The Basic Strategy Pursued
Consistently in Japan and Abroad
since the Beginning
Yakult is a product for consuming live cultures of
Lactobacillus casei strain Shirota, a beneficial bacteria
strain unique to the Company. The concept of
consuming live bacteria for health had not existed in any
country until Yakult was founded in Japan. Therefore, the
top priority of Yakults strategies overseas is to spread
the knowledge that Lactobacillus casei strain Shirota is a
live microorganism (Probiotic) that promotes health.
To explain this, it is necessary to work steadily to
convey the values of Lactobacillus casei strain Shirota
and promote understanding. In addition to explaining
the products and scientific facts on the strain by visiting
individual homes through our unique Yakult Lady System
and demonstrating products at stores, steady grassroots
efforts are essential, such as implementing public
relations activities at elementary schools, kindergartens
and community centers and making presentations to
hospital staffs such as nutritionists.
Unlike the hunting approach to marketing, which
pursues short-term results through major advertising
campaigns, these value dissemination activities take a
farming approach to marketing, which requires repeated
steady and thorough efforts as if cultivating a field. Since
its establishment, Yakult has consistently implemented
the latter, and for overseas business this philosophy is
unchanged. First, we aim to thoroughly understand the

culture and customs of a country where we operate, and
then implement activities to clearly explain and promote
the understanding of Yakults philosophy. Through such
activities, we create our customer base and establish an
overseas market from the ground up.
Global Market with Great Growth

Potential
There are more than 190 nations in the world, with
a total population of some 7.05 billion. At the same
time, Yakult sells its products in only 31 countries
and regions, excluding Japan. We plan to continue
to conduct detailed market research to expand and
cultivate our market.
In existing markets, approximately 4.29 billion people
live in the 31 nations and regions where we operate.
Of the total, Yakults marketing population is only 1.51
billion people. Accordingly, we see sufficient growth
potential in existing markets.
With regard to further cultivation of sales territories in
existing markets, we will gauge our market penetration
rate for each country and region by measuring the
number of bottles sold per population. In addition, we
will subdivide the areas managed by sales bases in
each country or region at appropriate times, according
to how mature the market is, carefully managing the
markets and diversifying products as needed.
ANNUAL REPORT 2013
11
World Population Top 10 (Excluding Japan)

2011 estimated
population
Bottles/marketing
population in 2012
China
India
United States
Indonesia
Brazil
Pakistan
Nigeria
Bangladesh
Russia
Mexico
1.34
1.24
0.31
0.24
0.19
0.17
0.16
0.15
0.14
0.11
0.70
0.10
0.21
1.72
1.83
3.94
* Japan
0.12
(Billions of people)
(Source: World Bank)
Global Population Growth

(Billions of people)
7
6
c. 6.13
c. 7.05
bn
0.92 bn
2
1
0
of countries
+ Population
entered
0.13
Growth rate
325%
3
0.13
0.75
0.57
2001
Population of countries
not entered
Population of Japan
Total population
of the world
increased by
+115.0%
bn
2.78
Marketing population
4.29 bn61%
Total population of countries
Yakult has entered
increased by
2.97 bn
1.51 bn21%
Growth rate
265%
1.51
2012
Marketing population
increased by
0.94 bn
Note: The above figures in ( )

denote % of total population.
ndonesia
Continued Growth in Indonesia
Indonesia is the fourth-largest nation in the world in
terms of population. In 2011, the country surpassed
the Netherlands in terms of GDP and was ranked 16th
in the world. Economic growth is likely to continue to
expand, as the percentage of the working age population in Indonesia (aged 15 to 64) is expected to rise
over the medium term.
Yakult Has Deep Roots in

Indonesia
In Indonesia, average daily sales of dairy products rose
by approximately 0.49 million bottles from a year earlier to
some 2.74 million bottles in 2012, buoyed by heightened
consciousness of good health among the growing
number of the middle class in recent years. Since its
current population stands at approximately 240 million,
Indonesia offers ample growth potential.
In addition to strong product appeal of Yakult, which
embodies our philosophy of Shirota-ism (preventive
medicine, the link between a healthy intestinal tract and
a long life and offering products at a price affordable to
everyone), the introduction of the Yakult Lady System
for the home delivery channel has helped Yakult build a
strong foundation in Indonesia.
Annual Average Bottles Sales/Day
Yakult Ladies in Indonesia have a multi-directional

network covering people of every age and income
across the towns they serve. They have established
a unique sales channel through local housewives for
delivery of Yakult by hand while recommending continued
consumption of one bottle of Yakult per day.
Yakult has also penetrated deeply into the local
distribution channel. In addition to sales through the most
powerful local retail store chain, Yakult is strengthening
marketing by providing mom and pop stores with
refrigerated showcases marked with the Yakult logo in an
effort to boost recognition of the Yakult brand. Despite
stiffer competition due to market entry by competitors,
Yakult has firmly established itself in Indonesia through
steady efforts, such as consistent implementation of
Shirota-ism, expansion of the Yakult Lady System and
further penetration through the retail store channel.
Yakults Production and Sales

Structure in Indonesia
We introduced Yakult in Indonesia in 1991 and have
continued to expand our business, overcoming the Asian
economic crisis in 1997. The latest figures show that
daily sales of Yakult reached 2.74 million bottles in 2012,
Surabaya Plant
P.T.Yakult Indonesia Persada
Number of Yakult Ladies and Bottles Carried at a Time
Expansion of Sales Bases in Indonesia
(People)
3,000
5,000
2,500
4,000
2,000
up 121.8% year on year. The number of Yakult Ladies

increased by 760 from a year earlier to 4,600 at the end
of 2012, while the number of retail stores selling Yakult
totaled 95,000, up by 12,000 from the same month of the
previous year, attesting to the continued strengthening of
our sales structure.
Since we expect demand to continue to rise
supported by the expansion of sales areas, we decided
to build a second plant near Indonesias secondlargest city of Surabaya. Production is slated to begin
in December 2013. By building the second plant on the
eastern half of the island of Java, which stretches some
1,000 kilometers in length, we aim to ensure that supply
smoothly complements our first plant, which is located in
Sukabumi in western Java.
(Bottles/day)
300
Bottles carried (right scale)

Yakult Ladies (left scale)
240
3,000
180
2,000
120
500
1,000
60
1,500
1,000
2002 03
04
05
06
07
08
09
10
11
12
2002 03 04 05 06 07 08 09 10 11 12
ANNUAL REPORT 2013
12
Head office
Sales offices
Sukabumi Plant
Surabaya Plant (under construction)
B
Value Dissemination Activities
Using Video-Showing Vehicles
Further Growth Is Expected for Brazil

Brazil is the fifth-largest country in the world in terms of
population. The country will host the soccer World Cup in
2014 and the Olympic Games in 2016, and is expected
to record strong growth as one of the BRICs economies.
We use video-showing minibuses to explain

about Yakult as a Probiotics product and its
value, at places where people gather. Up to
12 people can take part at one time, and each
session hosted by two employees lasts for some
30 minutes, including questions and answers.
Samples are handed out after each session.
Yakults Efforts to Revive Sales in Brazil

Since Yakult launched sales in So Paulo state in 1968,
it has made steady progress and now sells Yakult dairy
products in most parts of Brazil, covering 21 states
out of 27, including the federal district surrounding the
capital. Currently, the market penetration rate of Yakult
dairy products stands at 1.83% in Brazil, compared to
3.94% in Mexico, indicating the significant potential for
growth in the future.
Our road in Brazil has not always been an easy
one. In particular, economic turmoil in the early 1990s
due to hyperinflationreflected in the sharp fall of
the Brazil realgradually had a negative impact on
Yakults sales operations. Daily sales volume plunged
from some 2.8 million bottles during the peak period
to some 1.0 million bottles in 2004.
In this business environment, Yakult launched
an initiative aimed at revamping its organizational
structure and redeveloping markets in So Paulo state
Video-showing minibus
Plant Tours in Indonesia

We also invite visitors to a tour of the Yakult
plant to give them an opportunity to see how
Yakult is manufactured. During the tour, we
explain the corporate philosophy of the Yakult
Group and Yakult products by showing a video.
Some 60,000 people visit us each year.
Roraima
razil
Area Development in Brazil (As of 2012)
Pernambuco
Sergipe Rio Grande
do Norte
Amap
Paraba
Alagoas
Bottle sales/day: 1.85 million

Roraima
Amap
Cear
Amazonas
Par
Cear
Maranho
Piau
Acre
Rondnia
Tocantins
Mato Grosso
Participants at our plant tour
in 2005, and sales there grew to account for 71.3% of

total sales. Consequently, daily sales volume of Yakult
dairy products has recovered to some 2.0 million
bottles in Brazil as a whole.
Yakult is now gearing up for full-scale comeback
outside So Paulo state. Specifically, we are covering
the northeastern part of the country, focusing on the
populous states of Bahia and Pernambuco, as well
as Paran and Rio de Janeiro, with efforts centered
on the state capitals (Salvador in Bahia, Recife in
Pernambuco, Belo Horizonte in Minas Gerais, Curitiba
in Paran, and Rio de Janeiro).
Along with the expansion of sales areas, we intend to
make the supply structure of our products more efficient.
We started production in the third production facility at
the Lorena plant in March 2013. This has enabled us to
centralize production and distribution from the Lorena
and So Bernardo do Campo plants at the Lorena plant.
Reduction in overhead costs and improved logistics are
expected to strengthen our competitive advantage in
terms of both production and sales.
We aim to further enhance our recognition as a safe and
reliable brand, by focusing on convenience for consumers
and through grassroots activities in local communities.
Bahia
Federal District
Gois
Minas
Mato Grosso So Gerais
do Sul
Paulo Rio de Janeiro
Paran
So Paulo
Santa metropolis
Catarina
Rio Grande
Esprito Santo
do Sul
Amazonas
Par
Maranho
Piau
Acre
Rondnia
Tocantins
Rio Grande
do Norte
Paraba
Pernambuco
Alagoas
Sergipe
Distrito Federal
Gois
Minas
Mato
Gerais Esprito Santo
Grosso
do Sul So
Paulo
Rio de Janeiro
Paran
Santa Catarina
Rio Grande
do Sul
Mato Grosso
ANNUAL REPORT 2013
Bahia
13
Total Sales/People
3%
1%
0.5% and up
0.5% under
Lorena Plant
Yakult S/A Ind.E.Com (Brazil)
eview of Operations
Note: Sales by business segment and percentage of net sales by region include intersegment transactions.
Percentage of
Net Sales by Region (%)
Japan
Net Sales
(Billions of yen)
Yakult pursues several businesses in Japan. In addition
300
to the Food and Beverages business centered largely on

Probiotic products, our Pharmaceuticals business entails
manufacture and sales aimed at developing Yakult into a
200
pharmaceuticals specialist in the treatment of cancer.

Cosmetics and a professional baseball team, meanwhile,
73.8%
100
are central operations in our Others business segment.

For the fiscal year ended March 31, 2013, net sales in
Japan came to 246.4 billion.

FY 11
12
13
Food and Beverages
Yakult
Yakult 400
In Probiotic products, Yakult expanded activities aimed at

promoting the value and appeal of our proprietary living
Lactobacillus casei strain Shirota and Bifidobacterium
breve strain Yakult.
In our home delivery channel, we worked to develop
more long-term customers using sales activities that
get people to try our products through samples or trial
use. The focus of these activities was Yakult 400 series
Joie
Mil-Mil
Pretio
products, including both our mainstay Yakult 400 fermented

milk drink and Yakult 400LT.
In addition, we worked to promote continuous use of
Pretio, which was renewed in January 2012, and carried
out activities aimed at promoting the value of
Lactobacillus casei strain Shirota by emphasizing the
scientific evidence for its effects.
In our retail store channel, marketing staff organized
ANNUAL REPORT 2013
14
Breakdown of Probiotic Products Sales by

Channel (%)
Sales by Yakult Ladies
Sales via supermarkets,
convenience stores, and

other outside channels
41.7%
58.3%
activities aimed at promoting the value and appeal of

Lactobacillus casei strain Shirota by stressing the
scientific evidence and carried out retail store sales
promotion for each season to expand sales of the
fermented milk drink Yakult, Yakult Calorie Half and
other dairy products.
By product, we focused on our long-selling drinkable
yogurt brand Joie and adopted measures throughout the
year to revitalize the brand and boost sales. These included
a renewal of the package design in June 2012, the introduction of products offered for a limited period only, such
as Joie tropical mix flavor, the launch of a spoonable version
of Joie (Yogurt Cup) for the first time for the series, and an
advertising campaign featuring actress Ayame Goriki.
For the Sofl yogurt series, we introduced Sofl
Genki Yogurt in June 2012 and Sofl chestnut flavor in
September for a limited period only as part of efforts to

bolster the product line-up.
These measures helped achieve higher sales in dairy
products. Meanwhile, in juices and other beverages, we
carried out marketing campaigns for our mainstay
Toughman and Bansoreicha lines to shore up the
brands. To attract new customers, we introduced the
beauty drink CHOBI in Tokyo, Kanagawa, Saitama and
Chiba prefectures in May 2012 as the first product of
the Mitsuboshi Factory brand targeted at women in
their 20s and 30s. In addition, we started to sell the
125-ml version of Tangerine Orange Mixed Juice to
boost the line-up of products in small quantities and
expand sales mainly through school and hospital meal
channels. Despite these measures to bolster sales,
however, sales in the juices and other beverages
segment did not increase and sales actually declined

from the previous fiscal year.
As a result, net sales increased to 191.8 billion, or
2.0%, from the previous fiscal year.
Net Sales of Food and Beverages

(Billions of yen)
200
150
100
50
FY
11
12
13
Pharmaceuticals
CAMPTO 40mg for I.V.

infusion
ELPLAT I.V. INFUSION

SOLUTION 100mg
In Japan, we focused on promoting the proper use of

the cancer chemotherapeutic agent Elplat, actively
sponsoring lectures and presentations targeting
healthcare professionals in this area. We also stepped
up efforts to expand the awareness and use of
XELOX regimen for postsurgical adjuvant chemotherapy.
Gemcitabine for I.V. infusion

200mg Yakult
We sought higher sales and market share by specializing in oncology treatments and through active
marketing and sales channel expansion of the cancer
chemotherapeutic agent Campto, which received
approval for efficacy to pediatric malignant solid
tumors and its dosage and administration in March
ANNUAL REPORT 2013
15
2013; antineoplastic antimetabolite Gemcitabine

Yakult, whose additional effect for relapsed or refractory malignant lymphoma was approved in February;
activated folic acid drug Levofolinate Yakult; and
recombinant G-CSF preparation Neu-up.
In R&D, we are conducting clinical trials of Campto
eview of Operations
and Elplat to submit supplemental new drug applications for pancreatic cancer with FOLFIRINOX regimen
and for gastric cancer with Elplat containing regimen.
We also stepped up the development pipeline of
hypoxia activated prodrug PR610 in cooperation
with Proacta Inc., PI3K/Akt inhibitor Perifosine by
terna Zentaris Inc., oral HDAC inhibitor Resminostat
by 4SC AG, and humanized monoclonal anticancer
antibodies program LIV-2008 in cooperation with
LivTech Inc. In addition, we reached an agreement
with UMN Pharma Inc. and API Co., Ltd. in March
2013 to conduct R&D as well as commercialize
several antibody biosimilars, to further bolster our

position in the cancer treatment area.
Outside Japan, sales of the active pharmaceutical
ingredient of Campto slowed, as importers switched
increasingly to generic drugs.
Despite a higher sales volume, sales in Japan
declined from the previous fiscal year, due to the revised
pharmaceutical prices in April 2012. Overseas sales
also fell. As a result, net sales in the Pharmaceuticals
segment dropped 5.8%, to 37.1 billion.
Net Sales of Pharmaceuticals

(Billions of yen)
40
30
20
10
FY
11
12
13
Others
In our cosmetics operations, we continued to
promote the value and appeal of basic skin care
products, namely, our core brands Parabio, Revecy
and Revecy White based on home visits to counsel
customers on cosmetics.
We worked to attract new customers by focusing
on particular products and particular themes each
Cosmetic Parabio
quarter. The measures included promotion of the

value of superior anti-aging effect of the Parabio
series and advocating whitening properties of the
Revecy White series. In December 2012, we introduced Parabio AC Cream Sai, the top-of-the-range
cream in our Parabio series, drawing on our research
expertise on lactic acid bacteria that has been
developed since the Companys foundation, to
enhance customer satisfaction and sales. As a
result, overall sales and profit in our cosmetics
operations were virtually unchanged from the prior
fiscal year.
In professional baseball, the Tokyo Yakult Swallows
finished the regular season in third place, advancing to
the Climax Series for the second consecutive year. We
organized a variety of events at Jingu Stadium, held
fan appreciation programs and actively disseminated
The home baseball stadium filled

with the Yakult Swallows fans
ANNUAL REPORT 2013
16
team information to boost attendance.

As a result, the Others segment saw net sales fall
to 17.4 billion, or 6.2%, from the previous fiscal year.
Net Sales of Others

(Billions of yen)
20
15
10
FY
11
12
13
International
Business
Percentage of
Net Sales by Region (%)
Net Sales
(Billions of yen)
Outside Japan, we are developing the Companys Probiotics
90
operations in three regionsthe Americas, Asia and Oceania,

and Europewith the goal of establishing Yakult as a truly
global brand. As of March 31, 2013, Yakult Probiotic drinks
60
and other products are sold in 31 countries and regions

outside of Japan, with an average of 21.82 million sold per
day during the year under review. For the fiscal year ended
30
26.2
March 31, 2013, the International Business recorded net

0
sales of 87.5 billion.

FY 11
12
13
The Americas Asia and Oceania Europe
The Americas
Brazil, Uruguay, Mexico, Belize, the United States,
Canada
Brazil
In the United States, Yakult Light with fewer calories

was introduced in July 2012. In addition, the U.S.
Food and Drug Administration approved Lactobacillus
Mexico
United States
casei strain Shirota as generally recognized as safe

(GRAS). We will strive to further disseminate the
value of Yakult in the United States by capitalizing on
ANNUAL REPORT 2013
17
Mexico
this approval. Although sales in the Americas

increased steadily on a local currency basis, sales in
terms of yen amount were affected adversely by
eview of Operations
Net Sales in the Americas
(Billions of yen)
exchange rate fluctuations due to the yens appreciation against other currencies.
Net sales in the Americas decreased to 38.8
billion, or 0.6%, from the prior fiscal year.
50
40
30
20
10
0
United States
FY
11
12
13
Asia and Oceania

Taiwan, Hong Kong, Thailand, South Korea, the Philippines, Singapore, Brunei,
Indonesia, Australia, New Zealand, Malaysia, Vietnam, India, China
Indonesia
Australia
China
In Asia and Oceania, Yakult manufactures and sells

the fermented milk drink Yakult and other products
in Hong Kong, Singapore, Indonesia, Australia,
Malaysia, Vietnam, India, China and other countries.
In China, where sales volume of Yakult is expected
to rise, we are gradually expanding production capacity
at Tianjin Plant (Tianjin Yakult Co., Ltd.), while building
a second manufacturing facility at Guangzhou Yakult
Co., Ltd. in Guangdong Province with production
Malaysia
Vietnam
India
scheduled to start in spring 2014. We also opened

branches in Chengdu and Chongqing, Sichuan
Province and Zhengzhou City, Henan Province, to
boost sales in the inland regions of China, and began
to sell Yakult through the retail store channel there.
Sales of Yakult also commenced in Shijiazhuang,
Hebei Province, Nanchang, Jiangxi Province and
Changchun, Jilin Province, as part of efforts to expand
the sales area.
Net Sales in Asia and Oceania

(Billions of yen)
50
40
30
20
10
0
ANNUAL REPORT 2013
18
FY
11
12
13
In Vietnam, we started to sell Yakult in that nations

third-largest city of Haiphong through the retail store
channel in September 2012, after Ho Chi Minh City
and Hanoi.
In Indonesia, we are constructing a second manufacturing facility in East Java to meet strong sales
growth, with production expected to begin in December
2013. Net sales in Asia and Oceania increased to 41.3
billion, or 29.1%, from the prior fiscal year.
China (Shanghai)
Europe
28.0%
The Netherlands, Belgium, Luxembourg, the United Kingdom, Ireland, Germany,

Austria, Italy, France, Spain, Malta
The Netherlands
Belgium
United Kingdom
In Europe, Yakult manufactures the fermented milk

drink Yakult and other products in the Netherlands, and
sells them in the Netherlands, Belgium, the United
Kingdom, Germany, Austria, Italy and other countries.
Overall European sales in yen amounts were
affected by the yens strength, but sales in Italy and the
United Kingdom showed solid growth. Net sales in
Europe decreased to 7.5 billion, or 6.6%, from the
prior fiscal year.
Austria
Italy
Net Sales in Europe

(Billions of yen)
10
FY
11
ANNUAL REPORT 2013
12
19
13
Belgium
esearch & Development
Since its founding, Yakults R&D activities have vitally underpinned its ability to
create products that promote good health today and in the future. The R&D Division
pursues fundamental research in life science aimed at developing and applying
basic materials in food, pharmaceuticals, cosmetics and other areas.
Research and Development

Costs
(Billions of yen)
15
10
The Yakult Central Institute for Microbiological Research and

the Yakult Honsha European Research Center
Located in Kunitachi, Tokyo, since 1967, the Yakult Central
Institute for Microbiological Research, originally established
in Kyoto in 1955 as the Shirota Research Institute, is a
cutting-edge research facility in the Probiotics field investigating life science to benefit human health.
The study of useful microorganisms, particularly intestinal microflora, is the guiding theme of research, and the
institute has recorded numerous achievements, including
the discovery and use of lactic acid bacteria with high
levels of functionality. The Yakult Central Institute has
undergone building renovation and additions, as well as
the construction of new buildings, including a new food
research building equipped with the latest in laboratory
facilities that was completed in June 2009. We plan to construct four additional new research buildings (for research
management, pharmaceuticals and cosmetics, basic
studies, and quality and technological development), slated
for completion in 2015. Based on a concept of laboratory
surrounding forest and water designed to blend in perfectly
with its surroundings of lush green fields, the Yakult Central
Institute will be enhanced with more cutting-edge facilities,
which will allow researchers to efficiently carry out developmental projects and joint research.
The Yakult Honsha European Research Center for
Microbiology, ESV (YHER) was established in Ghent,
Belgium, in May 2005. The YHER is working to accumulate
scientific evidence on the benefits of drinking our Probiotic

products. By establishing a research base in Europe, the
advanced region for study of microorganisms, our goal is
FY 11
12
13
to support global business expansion encompassing not

only Europe, but also the Americas and Asia.
Organization of the Yakult Central Institute for Microbiological Research

Research and Development
Basic Studies
Intestinal ora Biophylaxis Probiotics Cancer prevention Intestinal immunity
Genomic analysis of microorganisms Discovery of yet-unknown intestinal bacteria
Screening of Basic Materials of Food, Pharmaceuticals, and Cosmetics

Discovery and improvement of useful microorganisms High-level purication and processing of enzymes
Development of techniques for utilization of food materials
Discovery and utilization of effective components in natural organic substances
Detection and improvement of useful components of milk Chemical synthesis and modication of organic compounds
Verification of functions of
food materials
Determining pharmacological
effects and mechanisms
Verification of functions of
cosmetic ingredients
Product Feasibility Tests

Safety testing
New food materials
ANNUAL REPORT 2013
20
Industrial feasibility tests
New pharmaceutical materials
New cosmetic materials
Recent R&D Accomplishments
Development of a system for sensitive quantification of a bacterium

known to cause nosocomial antibiotic-associated diarrhea in
human intestines: Confirmation of the habitual presence of
C. difficile in the intestine of healthy Japanese adults
Fermented milk that contains bifidobacteria to help treat rough

dry skin: Scientific clarification of the relationship between the
intestinal environment and skin irritation
Using the YIF-SCAN Yakult Intestinal Flora Scan, a system we developed to analyze
intestinal flora, we established sensitive and accurate quantification system for
Clostridium difficile (referred to hereafter as C. difficile) in human intestines that has been
identified as the major cause of nosocomial antibiotic-associated diarrhea.
This system uses the rRNA-targeted real-time-quantitative polymerase chain reaction
(RT-qPCR) method and enables the detection and quantification of not only C. difficile
spores but also vegetative cells*, which have not been measured simultaneously by the
conventional official method of selective cultivation. Analysis of feces using this method
has revealed that C. difficile is found widely in the intestines of healthy Japanese adults.
The results of this research were published in the academic journal Applied and
Environmental Microbiology.
Targeting adult women, Yakult conducted a drinking test for the Bifidobacterium breve
strain Yakult (bifidobacteria) and fermented milk containing galacto-oligosaccharides
(referred to hereafter as fermented milk containing bifidobacteria) in autumn and winter, the
season when skin is prone to dryness.
The test results confirmed that fermented milk containing bifidobacteria had an effect of
reducing skin dryness. We also observed a decrease in phenol levels in the serum. Based
on this, we gained the insight that drinking fermented milk containing bifidobacteria improved
the intestinal environment and thus helped decrease the concentration of phenol, which has
a negative influence on epidermal keratinization, both in the serum and in the skin and
normalized keratinization, leading to maintained hydration (level) of the stratum corneum.
The outcome has scientifically clarified part of the relationship between the intestinal environment and skin dryness, showing that fermented milk containing bifidobacteria can be
used effectively to improve the quality of life of women suffering from constipation and skin
dryness as well as women who are healthy. The results of the research were published in the
electronic edition of the academic journal Bioscience of Microbiota, Food and Health.
* A spore is a highly resistant spherical structure produced by some types of bacteria. It is formed under adverse
conditions for bacterial growth such as high temperature and malnutrition. Even when a bacterium dies, a spore
remains and germinates when circumstances are in place, regenerating into a bacterium. In contrast to a spore, a
normal state of a bacterium is called a vegetative cell.
Exterior view of bio-incubator facility located in the Technologiepark

* The YHER is located on the first floor of this building.
Yakult Central Institute for Microbiological Research
ANNUAL REPORT 2013
21
SR Activities
As a leading Probiotics company, Yakult believes it can fulfill its social responsibilities
by putting into practice its corporate philosophy of We contribute to the health and
happiness of people around the world through pursuit of excellence in life science in
general and our research and experience in microorganisms in particular. This is
accomplished through the principles of Shirota-ism, which we have followed since
the founding of the Company. Furthermore, considering the critical situation that the
global environment is in, we recognize that it is an extremely important issue for us
to create a resource-recycling, sustainable society and that this is one of the
responsibilities we must fulfill.
The Environment
Yakult first established an internal organization dedicated
to preserving the global environment back in November
1991. This was followed in June 1997 by the creation of
the Yakult Basic Policy on the Environment, which
encompasses the entire Group. Guided by the environmental philosophy and directives for action found in this
policy, we promote environmental protection activities
in every aspect of our business operations. In March
2004, our directives for action were revised to make
these guidelines more specific. Furthermore, to contribute to the conservation of biodiversity, we revised
the directives in January 2010. For Yakult, a company
that thrives on the bounty of nature represented by the
lactobacillus in our products, we have spelled out our
stance that being mindful of the global environment and
biodiversity is indispensable to conducting sustainable
corporate activities.
In March 2001, the Company drafted the first stage
plan of the Yakult Environmental Action Plan, and
starting from the fiscal year ended March 31, 2002 we
have implemented environmental protection measures

across all business areas, including R&D, production,
sales and administration, to reduce the environmental
burden caused by our business activities. Since the fiscal
year ended March 31, 2011, we have implemented the
fourth stage of our plan, which includes measures for
reducing greenhouse gas emissions and waste, and cutting
the volume of printer paper the Company uses.
In recognition of the need to continuously implement
such activities in tandem with business operations, in
March 2004 we attempted to transform all of our Group
companies in Japan into green companies by 2010.
In this way, we established the Yakult Eco Vision 2010,
which aims to contribute to the preservation of the global
environment and the formation of a sustainable society
and has produced successful results. This was followed
by the start of Yakult Sustainable Ecology 2020 from
the fiscal year ended March 31, 2013 to the target
year of 2020. While describing the future of the Company in specific terms according to the three aspects of
ANNUAL REPORT 2013
22
realization of a low-carbon society, promotion of efficient

use of resources and preservation of biodiversity,
this aims to form a sustainable society in harmony with
our stakeholders.
In the fiscal year ended March 31, 2013, Yakult carried
on its initiatives from the previous year, continuing to
introduce renewable energy with solar power generation
and other forms, implementing greenhouse gas reduction
efforts at dairy product plants and in logistics operations,
striving to achieve zero waste emissions, and promoting
fuel conversion. All these initiatives produced successful
results. Every year since the fiscal year ended March
31, 1995, the entire Yakult Group has conducted the
Yakult Environmental Protection Campaign as part of
environmental education. More than 130,000 people
have participated since the inception of the program,
and it is believed that the Company has had a considerable effect in steadily increasing environmental consciousness and social contributions among the Yakult
Group employees.
Community Activities
Initiatives by the Yakult Ladies
Since 1972, the Yakult Ladies have been carrying out Courtesy Visit Activities, which entail checking on the well-being
of elderly people living alone and chatting with them while
delivering Yakult products. In September 2012, as part of
this initiative, the Yakult Ladies presented elderly people living on their own with flowers and a message card. It is the
eighth instance of this program, and because the program
has brought such joy both to the Yakult Ladies presenting
the flowers and to elderly recipients alike, we plan to continue these activities in the hope that everyone involved will
continue to enjoy happy and healthy lives.
The Yakult Ladies also contribute to safety and peace of
mind in local communities by organizing crime prevention
Public Access to Plants

and safety patrols and maintaining contact with the police
and local governments.
To deepen peoples understanding of Yakults products

and the Groups commitment to environmental awareness
and safe, reliable products, we conduct tours of Yakult
Honsha and other Group company plants. In the fiscal year
ended March 31, 2013, tours were held at all domestic
plants, except at those where tours were temporarily suspended due to equipment work, and approximately
190,000 people from the general public participated. Plant
tours also take place at nearly all overseas plants. In addition, each year we hold plant festivals, and invite the local
community and the families of our employees to participate, with the aim of improving relations with local communities. In the fiscal year ended March 31, 2013, a total of
about 20,000 people participated in these festivals.
Conservation Activities
Yakult has embarked on a new mission to support conservation activities by signing an official sponsorship contract
with the C. W. NICOL AFAN WOODLAND TRUST.
The C. W. NICOL AFAN WOODLAND TRUST owns the
Afan Woodland in Shinano-machi in Nagano Prefecture.
While implementing activities to regenerate the devastated
rural village-vicinity landscapes into a woodland inhabited by a rich diversity of local wildlife, the trust also implements activities in this biodiversity-rich woodland to cultivate the human spiritto nourish the spirit of children for a
better future. We are engaged in conservation activities
through supporting these activities of the trust and by cooperating with Shinano-machi and Nagano Prefecture
through the Forest Foster Parent Program.
In addition, as one of our conservation activities, we participated in the Green Wave 2012 in which we planted trees
at 18 locations across the country including our groups
domestic plants. Initiated in 2009, the Green Wave is a
campaign promoted by the Secretariat of the Convention on Biological Diversity. The campaign calls for participants around the world to plant trees or implement other
green activities on May 22 at 10:00 (local time). These activities starting in East Asia and traveling west around the
world are described as the green wave.
Welcome festival at the plant
Environmental Protection Campaign

Since 1994, Yakult has been implementing the Environmental Protection Campaign to promote awareness
on environmental protection among our employees.
This is an on-going campaign implemented each June
the Environment Month advocated by the Japanese Ministry of Environmentwith timely themes such as the
3Rs, Reduction in Shopping Bags, and Biodiversity.
For our 18th campaign, this fiscal year we collected
ANNUAL REPORT 2013
23
Messages for Increasing Greenery from our employees

and donated funds to The OISCA Childrens Forest Park
project to be implemented at Viti Levu in Fiji.
Up until now, a cumulative total of more than 130,000
Yakult Group employees have participated in this
campaign. We will continue to engage in activities to
boost awareness of the need for environmental protection by providing thorough environmental education to
each and every employee.
orporate Governance
1. Basic Stance
Our basic stance on corporate governance is to promote highly
transparent management that is committed to the steady
development of operations in our core business domain.
Our corporate philosophy is We contribute to the health
and happiness of people around the world through pursuit
of excellence in life science in general and our research and
experience in microorganisms in particular. In pursuing this
philosophy, we believe it is important to implement transparent
management with an emphasis on well-developed internal
control functions. This includes efforts to ensure an appropriate
management organization and decision-making processes.
Corporate governance at the Company is also underpinned by
the company with Audit & Supervisory Board Members system.
3. Governing Bodies, Organizational

Operations and Operational Execution
Board of Directors
The Board of Directors is composed of 15 directors, including
four outside directors, and holds meetings in principle seven
times each year, in addition to convening special meetings as
needed. The seven Audit & Supervisory Board Members also
attend meetings. The Board of Directors deliberates on matters
within its jurisdiction as defined by law and company rules, and is
responsible for supervising the status of business execution.
Name
16.25%
0.35%
Other Japanese corporations
33.15%
Foreign institutions and others
28.75%
Japanese individuals and others 19.61%
Treasury stock
1.89%
Japanese
financial institutions
Japanese
securities companies
Major Shareholders
Professor, International Business Strategy,

Graduate School of International Corporate
Strategy, Hitotsubashi University; Outside
Director, Daiwa Securities Group Inc.;
Outside Director, Fukuoka Financial Group,
Inc.; Outside Director, The Bank of Fukuoka,
Ltd.; Outside Director, Sony Corp.; Director,
Sony Financial Holdings Inc.; Outside
Auditor, the Asahi Shimbun Company
Mr. Yasuda was appointed on the expectation that he would offer

pertinent advice regarding the overall management of the Company
that would further strengthen and enrich its management structure
based on the expertise in business strategy he has accumulated
over the years in wide-ranging positions including those of university
professor, consultant and business manager.
Masayuki
Fukuoka
Professor of Hakuoh University Faculty of

Law; specially approved visiting Professor
of Tohoku Fukushi University; Assist (Japan)
Secretary General
Mr. Fukuoka was appointed on the expectation that he would offer

objective views to the Companys management that would lead to
further reinforcement and enhancement of the management structure
based on his expertise and experience as a university professor
of political science studies. While he has no experience of direct
involvement in management of a company except as an outside
officer, the Company believes that he will be able to perform the duty
of outside director appropriately for the above reason.
Christian Neu
Strategic Advisor, Danone S.A.; Member of

strategic council of Groupe ARC International
Mr. Neu was appointed on the expectation that he would offer pertinent
advice from a broad perspective regarding overall management,
including future business development, which would lead to further
strengthening of the management structure based on the high rating
of his abundant overseas management experience.
Bertrand Austruy
Danone S.A. Group General Counsel
Same as above.
(As of March 31, 2013)
17.01%
6.55
3.69
3.00
2.82
2.48
2.36
1.46
1.40
1.24
(As of June 25, 2013)
Ryuji Yasuda
Percentage of
total shares issued
Barclays Bank PLC, Singapore Nominee/Danone

Probiotics Private Ltd.
Matsusho Co., Ltd.
Fuji Media Holdings, Inc.
MLPFS Nominee/Danone Asia Holdings Private Ltd.
Mizuho Trust & Banking Co., Ltd.
(retirement benefit trust (Mizuho Bank Account))
Kyoshinkai
State Street Bank and Trust Company 505041
Japan Trustee Services Bank, Ltd. (Trust account)
Kirin Beverage Corporation
Mizuho Bank, Ltd.
The four outside directors are listed in the chart below.

Reason for Appointment as Outside Director
The distribution of ownership among shareholders (on a

number of shares basis) and major shareholders is as follows:
(As of March 31, 2013)
Outside Positions as Representative
2. Capital Composition
Distribution of Ownership Among Shareholders
The Company introduced the Executive Officer System in

June 2011. This system strengthens the decision making of
the Board of Directors and business supervision functions, and
clarifies responsibilities for business execution, thereby increasing
the efficiency of these functions.
As a system of support for outside directors, the General
Affairs Department functions as the secretariat for the Board of
Directors, and serves in this capacity as a point of contact for all
Company officers, including outside directors.
Management Policy Council and the Executive

Officers Committee
The Company has established a set of meetings, the
Management Policy Council and the Executive Officers
Committee, designed to promote effective management
activities and accelerate decision making. These meetings are,
in principle, convened on a weekly basis.
Note: In addition to the above, the Company holds 1.89% of its own shares.
ANNUAL REPORT 2013
24

The Company has seven Audit & Supervisory Board Members,
including four outside Audit & Supervisory Board Members. All
Audit & Supervisory Board Members attend meetings of the
Board of Directors and other important company meetings and
audit the operational execution of the directors by examining
documents related to decision making and other matters. The
(As of June 25, 2013)
Audit & Supervisory Board Members strive to enhance the

effectiveness of their audits by forging close ties with the Internal
Audit Department and the accounting auditor.
The system of support for the Audit & Supervisory
Board consists of a staff assigned exclusively to the Audit &
Supervisory Board Members that functions as the secretariat
for the board. Furthermore, the Audit & Supervisory Board
convenes prior to meetings of the Board of Directors and other
important meetings to discuss the proposed agenda for the
meetings, and to share information gathered from materials
provided by relevant department and division heads, as well
as information gained from explanations received firsthand
and by other means. Furthermore, with respect to systems for
conveying information to outside Audit & Supervisory Board
Members, the full-time Audit & Supervisory Board Members
issue progress reports on a regular basis, and provide the
outside Audit & Supervisory Board Members with a range of
materials, including those from important company meetings
and decision making and audit-related materials.
The four outside Audit & Supervisory Board Members are
listed in the chart on the right.
Internal Audits
Internal audits are conducted by the Audit Office, an organization
that reports directly to the Companys President and that
performs financial and operational audits, including those of
Group companies in Japan and overseas. The head of the Audit
Office currently oversees a 14-member staff responsible for risk
avoidance and other internal audit functions. These personnel
conduct internal audits spanning the operations of all internal
departments and Group companies, as well as issuing concrete
advice and warnings with respect to operational improvements.
Accounting Auditor
The Company has appointed Deloitte Touche Tohmatsu LLC
to serve as the accounting auditor for the audit of its business
accounts as required by law. Compensation is paid to the
accounting auditor based on an auditing contract signed with
Deloitte Touche Tohmatsu.
Name
Outside Positions as Representative
Reason for Appointment as Outside Audit & Supervisory Board Member
Akihiko
Okudaira
Lawyer
Mr. Okudaira was appointed on the expectation that his expertise as a

lawyer and abundant experience would be reflected on auditing of the
Company that would lead to further reinforcement and enhancement of
the Companys management structure. While he has no experience of
being directly involved in the management of a company except as an
outside officer, the Company believes that he will be able to continue
to perform the duty as an outside Audit & Supervisory Board Member
appropriately for the above reason.
Ryohei Sumiya
Certified Public Accountant
Mr. Sumiya was appointed on the expectation that his expertise as an

accountant and abundant experience in corporate accounting would
be reflected on auditing of the Company that would lead to further
reinforcement and enhancement of the Companys management
structure. While he has no experience of being directly involved in the
management of a company except as an outside officer, the Company
believes that he will be able to continue to perform the duty as an outside
Audit & Supervisory Board Member appropriately for the above reason.
Seijuro
Tanigawa
President of Yakult Kobe Sales Co., Ltd.
Mr. Tanigawa was appointed on the expectation that his long record
of managing a Yakult sales company would be an advantage when
performing audit operations primarily on the legality of the directors
execution of duties, thus contributing significantly to the development of
the entire Yakult Group.
Setsuko
Kobayashi
President of Yakult Joetsu Sales Co., Ltd.
Same as above.
Corporate Governance Framework

Shareholders/General Shareholders Meeting
Appointment/Removal
Audit & Supervisory
Board Members/
Audit & Supervisory Board
Appointment/Removal
Board of Directors
Audits
Management Policy
Council
Coordination
(Internal Control)
Audit Office
(Internal Audit Department)
Representative Director
(Chairman and CEO)
(President and COO)
Executive Officers
Committee
Legal Office
Business Execution
(Compliance Management
(All Divisions)
Department)
(Business Execution)
Within the Company
ANNUAL REPORT 2013
25
Audits
Advice
and
Guidance
Advice
and
Guidance
Advice
and
Guidance
Appointment/
Removal
Accounting
Auditor
Corporate Ethics
Committee
Compliance
Committee
Corporate
Lawyer
4. Internal Control Systems and Policies

The Company resolved at the Board of Directors meeting
on May 19, 2006 to establish an internal control system as
mandated for a large company with a Board of Directors by the
Companies Act and its enforcement regulations. The Company
i) Systems to ensure that the performance of duties
by directors and employees complies with laws and
articles of incorporation
As standards for executives and workers to properly perform
business activities, the Company has established the Yakult Code
of Ethics and Code of Practice. The Yakult Code of Ethics and
Code of Practice have been distributed to all persons concerned,
aiming to familiarize them with the details of the codes. At the
same time, the Company is continuously offering in-house
training programs regarding compliance.
In addition, a meeting of the Compliance Committee, which
consists of external knowledgeable persons, is held on a
regular basis to receive advice regarding the development of the
Companys compliance system.
Furthermore, the Company has established an internal
reporting system, aiming to improve the self-cleaning
functions by which it detects its own violations of law and takes
corrective actions.
In addition, the Company will resolutely block and repudiate
anti-social forces that pose a threat to business activities. We will
also maintain a close relationship with the police under normal
circumstances. At the same time, we will endeavor to supervise
transactions through the Corporate Ethics Committee, which
consists of external experts as the main committee members, and
will tackle any unreasonable claims organizationally and take all
possible legal measures.
ii) Systems regarding preservation and management of
information related to the performance of duties by directors
Minutes of general shareholders meetings and Board of Directors
meetings are preserved properly in accordance with law.
In addition, in line with the Rules for Handling Documents,
information related to the performance of duties by directors is
recorded and preserved in documents or electromagnetic media
(hereinafter referred to as documents and other media).
Directors and Audit & Supervisory Board Members can look
through the minutes and the documents and other media at any time.
Furthermore, the Rules for Handling Documents include rules
regarding maintaining confidentiality and taking preventive
measures against information leakage.
iii) Rules and other systems regarding the management
of risks for losses
The Administrative Division plays a central role in supervising
the conditions of cross-sectional risk and making company-wide
responses. The department concerned handles the management of
risks related to the operations of each department.
In addition, to respond to crises that appear suddenly, there are the
revises the details of this resolution promptly in response to

changes inside and outside the Company. At the current time,
the details are as follows:
The Company aims to proceed with its business activities
in accordance with its corporate philosophy, We contribute to
Risk Management Rules, which include a rule to have the Companys

President or general managers serve as the head of various task forces
set up in accordance with the details of crisis situations.
Furthermore, to provide safe products to customers and establish a
quality assurance system, the Quality Assurance Committee has been
established and its meetings are being held. In addition, the Food
& Beverages Quality Assurance Department has been established
as an independent department to carry out exclusive company-wide
supervisory operations related to food quality assurance.
& Supervisory Board Members serve as full-time staff members

who support Audit & Supervisory Board Members. In terms of
the organizational structure, the staff members serve as auditing
officers and are independent of the Auditing Department, which is
an internal auditing department. They carry out operations under
the direct supervision of Audit & Supervisory Board Members.
iv) Systems to ensure that the performance of duties by

directors is efficient
To secure the independence of full-time employees who

support the duties of Audit & Supervisory Board Members from
directors, such employees do not belong to any department in the
organization and are not under the supervision of directors.
In addition, full-time Audit & Supervisory Board Members
directly evaluate the performance of such employees to respect
their independence.
The Company has introduced the Executive Officer System to

strengthen the functions of the Board of Directors to make decisions
and supervise as well as to define the responsibilities in executing
operations, and ultimately to improve the efficiency of these functions.
In addition, the Companys decision-making methods are stipulated
in the Rules for Decision-Making, aiming to make decisions in line
with the level of importance. At the same time, a management policy
meeting and the Executive Officers Committee are held every week in
principle, aiming to speed up decision making.
Moreover, to carry out business operations efficiently, the organizational
structure of the Company and its management standards are stipulated in
the Organization Rules and the Table of Division of Duties.
v) Systems to ensure that operations at the concerned
joint-stock company and the corporate group consisting of
the joint-stock companys parent company and subsidiaries
are appropriate
The Company endeavors to ensure that operations at its
subsidiaries are appropriate by sending its executives or
employees to the subsidiaries and having them serve as executives
of the subsidiaries.
In addition, the Rules for the Management of Affiliates include
provisions to require the subsidiaries and affiliates to obtain
advance approval and provide reports. At the same time, the
Company has established an internal support system by setting up
a department in charge of the management of the subsidiaries for
securing the appropriate operations.
Furthermore, the Auditing Department, which is the Companys
internal auditing department, carries out audits.
vi) Matters regarding employees who support the duties
of Audit & Supervisory Board Members in cases in which
Audit & Supervisory Board Members make a request to
assign such employees
Employees who have a thorough knowledge of the Companys
business operations and can properly support the duties of Audit
vii) Matters regarding the independence of employees who

support the duties of Audit & Supervisory Board Members,
who are mentioned in the previous item, from directors
viii) Systems for directors and employees to provide

reports to Audit & Supervisory Board Members and other
systems regarding reports provided to Audit & Supervisory
Board Members
Audit & Supervisory Board Members attend Board of Directors
meetings and other important meetings and read minutes of such
meetings on an as-needed basis. In addition, Audit & Supervisory
Board Members confirm the details of important requests. There
is a system in which Audit & Supervisory Board Members can be
apprised of the details of such requests.
Furthermore, reports regarding the results of internal audits are
provided to Audit & Supervisory Board Members on a regular basis.
The Rules for Audits by Audit & Supervisory Board Members also
stipulate that Audit & Supervisory Board Members can request
directors to provide business reports and request related departments,
subsidiaries, and other parties to provide reports if necessary.
ix) Other systems to ensure that audit operations of Audit
& Supervisory Board Members are carried out effectively
The Rules for Audits by Audit & Supervisory Board Members
ensure that Audit & Supervisory Board Members effectively
exercise the authority to attend Board of Directors meetings
and other important meetings, ask for explanations in cases
of failure to attend meetings and read minutes and documents,
read documents necessary to investigate business conditions
and request related departments to provide reports, and request
subsidiaries and affiliates to provide reports and investigate
business and asset conditions.
In addition, they can hear opinions from lawyers, certified public
accountants, consultants, and other outside experts if necessary.
ANNUAL REPORT 2013
26
the health and happiness of people around the world through

pursuit of excellence in life science in general and our research
and experience in microorganisms in particular. To achieve
this, the Company believes that it is important to implement
management that places emphasis on strengthening and
enhancing internal control functions as a company that is
widely trusted by society.
Based on this perspective, the Company has made the
following resolutions on basic policies regarding building
internal control systems after reconfirming the current situation
at the Company in relation to the development of internal
control systems.
Meanwhile, the contents of the resolutions will be revised
on a timely basis in line with revisions to laws and environmental
changes inside and outside the Company, aiming to further
strengthen and enhance internal control systems.
5. Other Corporate Governance Systems

(1) Basic approach regarding timely disclosure
With respect to information disclosure, especially in a timely
manner, in the Yakult Code of Ethics and Code of Practice, the
Company makes the following commitment: The Company
will actively disclose all relevant information to our customers,
shareholders, employees and business partners and increase
the transparency of management, to gain the full trust of society
through our corporate activities. Based on this approach, the
Company is disclosing information in a timely manner.
(2) Internal structure related to timely disclosure

Facts and data appropriate for public disclosure from each
department within the Company (including subsidiaries) are
compiled by the Public Relations Department. In parallel,
each department within the Company, pursuant to the Rules
for Decision-Making, decides items for disclosure based on
prescribed decision-making procedures. Facts and data
not vetted in this manner are not publicly disclosed. When
making final decisions, the disclosing department liaises with
the General Affairs Department, the body responsible for
B
coordinating timely disclosure, as it moves decision-making
procedures forward, during which time a determination is
made of the necessity for timely disclosure. The General
Affairs Department refers to two standards in making this
determination: the Rules for Timely Disclosure and the status
of other finalized disclosure decisions within the Company.
The decision is then made to officially conduct the timely
disclosure of facts and data meeting these criteria.
The Company is listed on the Tokyo Stock Exchange
(TSE). Any information from the Company marked for
timely disclosure is registered on TDnet, a system for timely
disclosure provided by TSE. The registration of information
for timely disclosure and responses to inquiries from TSE
personnel are conducted by the General Affairs Department,
the body responsible for coordinating timely disclosure.
Following registration, information targeted for timely disclosure
is quickly transmitted simultaneously to all relevant media
outlets, with related materials disclosed at the same time on
oard of Directors and Audit & Supervisory Board Members (As of June 25, 2013)

Chief Executive Officer

Chief Operating Officer
Sumiya Hori
Chief Operating Officer
Takashige Negishi
Directors
Sumiya Hori
Takashige Negishi
Directors
Yoshihiro Kawabata
Chizuka Kai
Masahiro Negishi
Shigeyoshi Sakamoto
Hiroshi Narita
Richard Hall
Directors (Part-Time)
Ryuji Yasuda
Masayuki Fukuoka
Christian Neu
Bertrand Austruy
Yasuo Ozeki
Koso Yamamoto
Takashi Matsuzono
the Companys website.
(3) Check functions to mitigate risks associated with

the improper execution of timely disclosure
The Company has considered a variety of risk scenarios,
including those in which information marked for timely
disclosure is inadvertently overlooked; information is
prematurely disclosed; and data pertaining to sudden crises
are not promptly disclosed. A single department, the General
Affairs Department, which is responsible for coordinating
timely disclosure, acquires and shares information about the
criteria for determining the necessity of timely disclosure,
and checks information pertaining to final decisions made
internally, as well as primary information when sudden crises
and incidents arise. This configuration allows check functions
to work and enables timely disclosure without any omissions.

Chief Executive Officer
Senior Audit & Supervisory Board Members
Yoshihiro Kawabata
Chizuka Kai
Masahiro Negishi
Divisional General Manager of

Administrative Division, and International
Business Division
Divisional General Manager of Research

& Development Division, and Production
Division
Divisional General Manager of Food

and Beverages Business Division, and
Cosmetics Business Division
Shigeyoshi Sakamoto
Hiroshi Narita
Richard Hall

Pharmaceuticals Business Division

Management Support Division
ANNUAL REPORT 2013
27
Akinori Abe
Hiroshi Yamakami
Akihiko Okudaira
Ryohei Sumiya
Seijuro Tanigawa
Setsuko Kobayashi
Koichi Yoshida
Financial
Section
inancial Section
Consolidated Five-Year Summary

YAKULT HONSHA CO., LTD. and its subsidiaries
Years ended March 31, 2013, 2012, 2011, 2010 and 2009
Thousands of
U.S. dollars
(Note 2)
Millions of yen
2009
2010
2012
2011
2013
2013
For the year:

Net sales.............................................................................................................
Selling, general and administrative expenses.......................................................
Operating income...............................................................................................
Net income.........................................................................................................
Research and development costs.......................................................................
Capital investments.............................................................................................
Depreciation and amortization ............................................................................
293,490
138,113
16,744
11,325
9,248
27,967
18,571
290,678
138,584
18,991
13,249
9,622
19,980
18,913
305,944
147,139
20,401
13,169
11,480
23,970
19,628
312,553
319,193
$3,432,184
149,214 148,581 1,597,642
20,817
23,068
248,045
13,292
16,379
176,120
12,414 10,761 115,708
25,007 33,587 361,155
18,337 19,435 208,973
At the year-end:
Total assets.........................................................................................................
Net property, plant and equipment......................................................................
Total liabilities......................................................................................................
Total equity ........................................................................................................
361,902
131,321
134,936
226,966
389,892
130,391
140,970
248,922
392,828
133,717
141,857
250,971
397,214
438,176
$4,711,568
136,963 150,612 1,619,486
144,971
151,077
1,624,486
252,243
287,099
3,087,082
U.S. dollars
(Note 2)
Yen
Per share of common stock:

Basic net income................................................................................................
Total equity (Note 3)............................................................................................
Cash dividends applicable to the year.................................................................
65.75
1,195.60
20.00
Financial ratios:
Return on equity (ROE) (%).................................................................................
Equity ratio (%)....................................................................................................
5.1
56.8
77.11
1,300.21
20.00
6.2
57.4
76.55
1,313.37
22.00
5.9
57.5
77.32
1,328.61
22.00
5.8
57.6
95.03
1,517.88
23.00
1.02
16.32
0.25
6.7
59.8
Notes: 1. Figures are rounded to the nearest million.

2. The translation of Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan and has been made at the rate of 93 to U.S.$1, the approximate rate of exchange at
March 31, 2013.

3. Minority interests are not included in equity for the calculation.
Financial Section
Contents
29 Managements Discussion and Analysis
35 Consolidated Balance Sheet
36 Consolidated Statement of Income

Consolidated Statement of Comprehensive Income
37 Consolidated Statement of Changes in Equity

38 Consolidated Statement of Cash Flows
39 Notes to Consolidated Financial Statements
53 Independent Auditors Report
ANNUAL REPORT 2013
28
Managements Discussion and Analysis
OVERVIEW
year. Consequently, net income jumped 23.2%, to 16.4 billion, and the return on sales
In the fiscal year ended March 31, 2013, the Japanese economy appeared to move toward
increased to 5.1%, or 0.8 percentage point higher than in the previous year.
recovery. The improved outlook for exports and the effects of economic and fiscal measures to
stimulate the economy more than offset the downside risk resulting from a slowdown in the
SALES, COSTS, EXPENSES AND EARNINGS
global economy and heightened uncertainty surrounding overseas economies such as Europe.
SALES
Net sales rose 2.1%, to 319.2 billion, despite the impact of negative 4.1 billion from
In these circumstances, the Yakult Group (the Group) worked to build awareness and
understanding of the Probioticsliving microorganisms that provide health benefits by
foreign currency fluctuations.
improving the balance of intestinal florathat constitute the bedrock of our operations,
while striving to communicate the superiority of our products. In addition, the Group sought
(Japan) accounted for 57.5% of sales, or 0.4 percentage point lower than in the previous
to improve its performance by taking steps to shore up its sales organization, develop new
fiscal year. Food and Beverages (Overseas) accounted for 26.2% of sales, or 1.9 percentage
products, upgrade its production facilities, and vigorously enhance its overseas operations
points higher than in the previous fiscal year. Pharmaceuticals generated 11.1%, down 1.0
and pharmaceuticals business.
percentage point from the previous fiscal year, and Others contributed 5.2%, down 0.5
percentage point from the previous fiscal year.
In the fiscal year under review, total global sales of Yakult and other fermented milk products
Looking at net sales by reporting segment (before reconciliation), Food and Beverages
grew to 30.7 million bottles per day, marking a historical record of more than 30.0 million bottles
sold per day for the first time since YAKULT HONSHA CO., LTD.s (the Company) foundation.
COSTS, EXPENSES AND EARNINGS
As a result of these efforts, on a consolidated basis, net sales advanced 2.1% from the
Consolidated cost of sales increased 3.5%, to 147.5 billion. As a result, the cost of sales
previous fiscal year, to 319.2 billion. Operating income climbed 10.8%, to 23.1 billion,
ratio rose 0.6 percentage point, to 46.2%. Gross profit increased 1.0%, to 171.6 billion,
while the operating margin rose to 7.2%, or 0.5 percentage point higher than the previous
and the gross profit margin decreased 0.6 percentage point, to 53.8%.
Net Sales
Breakdown
Breakdown
Breakdown
ofofNet
Net
ofSales
Net
Sales
Sales
(before
(before
(before
eliminations)
eliminations)
eliminations)
(FY2013)
(FY2013)
(FY2013)
Overseas
Overseas
Overseas
Net
NetSales/
Net
Sales/
Sales/
Ratio
Ratio
Ratio
totoTotal
Total
to Total
Net
NetSales
Net
Sales
Sales
(Billions of yen)
(%)
(%) (%)
(Billions
(Billions
(Billions
ofofyen)
yen)
of yen)
400
300
Operating
Operating
Operating
Income
Income
Income
and
andand
Operating
Operating
Operating
Margin
Margin
Margin
(%)
(%) (%)
(Billions
(Billions
(Billions
ofofyen)
yen)
of yen)
(%)
(%) (%)
100
100 100
50.0
50.0 50.0
2525
25
10.0
10.0 10.0
8080
80
40.0
40.0 40.0
2020
20
8.0
8.0 8.0
6060
60
30.0
30.0 30.0
1515
15
6.0
6.0 6.0
4040
40
20.0
20.0 20.0
1010
10
4.0
4.0 4.0
2020
20
10.0
10.0 10.0
55
2.0
2.0 2.0
200
100
FY 09 10 11 12 13
57.5%
57.5%
57.5%
Food
Foodand
Food
andBeverages
Beverages
and Beverages
(Japan)
(Japan)
(Japan)
Food
Foodand
Food
andBeverages
Beverages
and Beverages
(Overseas)
(Overseas)
(Overseas)
26.2%
26.2%
26.2%
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
11.1%
11.1%
11.1%
Others
Others
Others
5.2%
5.2%5.2%
00
0
00
FYFY
0909
FY 10
09
10 11
10
11 12
11
12 13
12
13 13
Overseas
Overseas
Overseas
net
netsales
sales
net(left
sales
(leftscale)
scale)
(left scale)
Ratio
RatiotoRatio
tototal
total
tonet
total
netsales
sales
net(right
sales
(rightscale)
(right
scale)scale)
ANNUAL REPORT 2013
29
00
0 09
00
FYFY
09
FY 10
09
10 11
10
11 12
11
12 13
12
13 13
Operating
Operating
Operating
income
income
income
(left
(leftscale)
scale)
(left scale)
Operating
Operating
Operating
margin
margin
margin
(right
(rightscale)
(right
scale)scale)
Selling, general and administrative (SG&A) expenses decreased 0.4%, to 148.6
In our home delivery channel, we promoted to develop more long-term customers
billion. This decline resulted mainly from lower research and development (R&D) expenses
using sales activities that get people to try our products through samples or trial use. The
Breakdown
of Net
for new drug development. The SG&A expense ratio
decreased
1.2Sales
percentage points, to
Overseas
Net Sales/
Operatingincluding
Income and
focus
of these
activities was Yakult 400 series products,
both our mainstay Yakult
46.5%. R&D expenses declined 1.7 billion year on(%)

year, to 10.8 billion. As a percentage
400
fermented milk drink and Yakult 400LT. In addition,
we worked to promote continuous
(Billions of yen)
(Billions of yen)
of net sales, R&D expenses fell 0.6 percentage point, to 3.4%.
use100of Pretio, which was renewed

aimed at
25 and carried out activities 10.0
50.0 in January 2012,
promoting the value of Lactobacillus casei strain Shirota by emphasizing the scientific
(before eliminations) (FY2013)
Ratio to Total Net Sales
As a result, operating income rose 10.8%, to 23.1 billion, and the operating margin
80
evidence
for its effects.
increased 0.5 percentage point, to 7.2%.

Operating Margin
(%)
Other incomenet amounted to 4.9 billion, down 0.3 billion from a year earlier, mainly
(%)
40.0
8.0
20
In our retail store channel, marketing staff organized activities aimed at promoting the
30.0
60
6.0
15
due to a decrease in foreign exchange gain and the absence of a refund of the social insur-
value and appeal of Lactobacillus casei strain Shirota by stressing the scientific evidence
ance premium in the fiscal year under review, in contrast to the previous fiscal year.
and40carried out retail store sales20.0

promotion for each10season to expand sales of fermented
4.0
Income taxes amounted to 8.5 billion.
milk drink Yakult and Yakult Calorie Half.
Consequently, net income increased 23.2%, to 16.4

billion,
and
the return
Food and
Beverages
(Overseas)
26.2% on sales
rose 0.8 percentage point, to 5.1%.
Food and Beverages (Japan)
57.5%
Pharmaceuticals
Others
11.1%
5.2%
20
10.0
2.0
By product, we focused on our long-selling drinkable yogurt brand Joie and adopted
measures
throughout the year to0 revitalize the brand0 and boost sales. These included
the
0
0
FY 09 10 11 12 13
FY 09 10 11 12 13
renewal of package design in June 2012, the introduction of products offered for a limited period
OVERVIEW BY SEGMENT
Overseas net sales (left scale)

to total
salestropical
(right scale)
only,Ratio
such
asnet
Joie
mix
FOOD AND BEVERAGES (JAPAN): In Probiotic products, Yakult expanded activities
the first time for the series, and an advertising campaign featuring actress Ayame Goriki.
aimed at promoting the value and appeal of our proprietary living Lactobacillus casei strain
Shirota and Bifidobacterium breve strain Yakult.
Sofl chestnut flavor in September for a limited period only as part of efforts to bolster the
flavor, the launch of a
Operating income (left scale)

Operating margin
(right scale)
spoonable
version
of Joie
(Yogurt Cup) for
For the Sofl set yogurt series, we introduced Sofl Genki Yogurt in June 2012 and
product lineup.
Net Income
Operating Income (loss) by

Business Segment
(Billions of yen)
(Billions of yen)
20
Meanwhile, in juices and other beverages, we carried out marketing campaign of our
Total Assets and Equity
(Billions2012
of yen) as the first product of the Mitsuboshi Factory
(Billions of yen)
May
brand targeted at women in their
40
20s500and 30s. In addition, we started to sell the 125ml
version of Tangerine Orange Mix
Juice to boost the line-up of products in small quantities to expand sales mainly through
15
400
school and hospital meal channels. Despite these 30measures to bolster sales, however,
sales
300 in the juices and other beverages segment did not increase and sales actually
10
declined from the previous fiscal year.

5
20
200
Net sales increased to 191.8 billion, or 2.0%, from the previous fiscal year, and
segment profit fell 3.2%, to 9.5 billion.
FY 09 10 11 12 13
Capital Investments and
we
introduced
beauty
drink CHOBI in Tokyo, Kanagawa,
Saitama
and Chiba prefectures in
(Excluding
Minority
Interests)
Depreciation
and Amortization
10
These measures helped achieve higher sales and profit in dairy products.
mainstay Toughman and Bansoreicha to shore up the brands. To attract new customers,
20
15
10
100
FY 09
10
11
12
0
operations
in
FOOD
AND
FY
09 BEVERAGES
10 11 12 13(OVERSEAS): Yakults 0overseas
FY 09 10
11 12 commenced
13
Total assets
March
1964 with the establishment of Yakult Co.,Capital
Ltd.investments
(Taiwan). They now extend to 30
13
Food and Beverages (Japan)

Food and Beverages (Overseas)
Pharmaceuticals
Others
ANNUAL REPORT 2013
Equity (excluding minority interests)
Depreciation and amortization
countries and regions outside Japan, and are centered on 26 business bases and 1
research center. These operations focus primarily on the production and sale of the
30
Net sales in Europe decreased to 7.5 billion, or 6.6%, from the prior fiscal year, and
fermented milk drink Yakult. Average daily sales of all Yakult products overseas were
approximately 22.53 million bottles in March 2013.
segment profit rose 86.9%, to 0.3 billion.
In the Americas, Yakult manufactures and sells the fermented milk drink Yakult and
other products in Brazil and Mexico, and imports products for sale in the United States,
PHARMACEUTICALS: In Japan, we focused on promoting the proper use of the cancer
and other countries.
chemotherapeutic agent Elplat, actively sponsoring lectures and presentations targeting
In the United States, Yakult Light with lower calorie was introduced in July 2012. In
healthcare professionals in this area. We also stepped up efforts to expand the awareness
addition, the U.S. Food and Drug Administration approved Lactobacillus casei strain
and use of XELOX regimen for postsurgical adjuvant chemotherapy. We sought higher sales
Shirota as generally recognized as safe (GRAS). We will strive to boost sales of Yakult in the
and market share by specializing in oncology treatments and through active marketing and
United States by capitalizing on this approval.
sales channel expansion of the cancer chemotherapeutic agent Campto, which received
Although sales in the Americas increased steadily on a local currency basis, sales in
approval for efficacy to pediatric malignant solid tumors and its dosage and administration in
terms of yen amount were affected adversely by exchange rate fluctuations due to the
March 2013; antineoplastic antimetabolite Gemcitabine Yakult, whose additional effect for
yens appreciation against other currencies.
relapsed or refractory malignant lymphoma was approved in February; activated folic acid
drug Levofolinate Yakult; and recombinant DNA G-CSF chemotherapy treatment Neu-up.
Net sales in the Americas decreased to 38.8 billion, or 0.6%, from the prior fiscal year,
and segment profit declined 1.5%, to 8.7 billion.
In R&D, we are conducting clinical trials of Campto and Elplat for pancreatic cancer to
In Asia and Oceania, Yakult manufactures and sells the fermented milk drink Yakult and
increase indications of FOLFIRINOX regimen and to prove Elplats additional efficacy for
other products in Hong Kong, Singapore, Indonesia, Australia, Malaysia, Vietnam, India,
gastric cancer. We also stepped up the development pipeline of hypoxia activated prodrug
China and other countries.
PR610 in cooperation with Proacta Inc., PI3K/Akt inhibitor Perifosine by terna Zentaris
In China, where sales volume of Yakult is expected to rise, we are gradually expanding
Inc., oral HDAC inhibitor Resminostat by 4SC AG, and humanized monoclonal anticancer
production capacity at Tianjin Yakult Co., Ltd., while building a second manufacturing
antibodies program LIV-2008 in cooperation with LivTech Inc. In addition, we reached an
facility at Guangzhou Yakult Co., Ltd. with production scheduled to start in spring 2014.
agreement with UMN Pharma Inc. and API Co., Ltd. in March 2013 to conduct R&D as well
We also opened sales bases in Chengdu and Chongqing, Sichuan Province and Zhengzhou,
as commercialize several antibody biosimilars, to further bolster our position in the cancer
Henan Province, to boost sales in the inland regions of China, and began to sell Yakult
treatment area.
through the retail store channel there. Sales of Yakult also commenced in Shijiazhuang,
Hebei Province, Nanchang, Jiangxi Province and Changchun, Jilin Province, as part of
importers switched increasingly to generic drugs.
efforts to expand the sales area.
due to the revised pharmaceutical prices amount in April 2012. Overseas sales also fell. As
In Vietnam, we started to sell Yakult in that nations third largest city of Haiphong
Outside Japan, sales of active pharmaceutical ingredient of Campto slowed, as

Despite a higher sales volume, sales in Japan declined from the previous fiscal year,
through the retail store channel in September 2012, after Ho Chi Minh City and Hanoi.
a result, consolidated sales in the Pharmaceuticals segment dropped 5.8%, to 37.1
billion, while segment profit was down 11.5%, to 9.0 billion.
In Indonesia, we are constructing a second manufacturing facility in East Java to meet
strong sales growth, with production expected to begin in December 2013.

OTHERS: This segment encompasses Yakults cosmetics operations as well as its profes-
Net sales in Asia and Oceania increased to 41.3 billion, or 29.1%, from the prior fiscal
year, and segment profit jumped 73.6%, to 9.6 billion.
sional baseball team operations.
In Europe, Yakult manufactures the fermented milk drink Yakult and other products in
In our cosmetics operations, we continued to promote the value and appeal of basic
the Netherlands, and sells them in the Netherlands, Belgium, the United Kingdom,
skin care products, namely, our core brands Parabio, Revecy and Revecy White based on
Germany, Austria, Italy and other countries.
home visits to counsel customers on cosmetics.
Overall European sales in yen amounts were affected by the yens strength, but sales
We worked to attract new customers by focusing on particular products and particular
themes each quarter. The measures included promotion of the value of superior antiaging
in Italy and the United Kingdom showed solid growth.
ANNUAL REPORT 2013
31
Operating
Operating
Income
Income
(loss) (loss)
by by
Business
Business
Segment
Segment
20
series. In December 2012, we introduced Parabio AC Cream Sai, the top-of-the-range
Overseas
Overseas
Net Sales/
Net Sales/
Operating
Operating
Income
Income
and and
cream in our Parabio series, drawing on our research expertise on lactic acid bacterium
Ratio Ratio
to Total
to Net
TotalSales
Net Sales
Operating
Operating
Margin
Margin
15
10.0virtually
10.0
25 cosmetics
25
100sales.
100 As a result, overall sales
50.0 50.0
and
and profit in our
operations were
10

(Billions
(Billions
of yen)
of yen)developed
that has
been
80
80
40.0
40.0
20
8.0
20
8.0
20.0 20.0
4.0
10
As a40result, the Others segment
saw net sales 10
fell 6.2%,
to 17.4 billion, and4.0segment
10.0
FINANCIAL
POSITION
0
FY0 09FY 10
09
11
10 12
11 13
12 013
10.0
2.0
FY0 09FY 10
09 11
10 12
11 13
12 013
increased
0.4 percentage point, to 25.1%.
0
0
40
20
400
(Billions (Billions
of yen) of y
40
40
30
30
200
200
20
20
100
100
10
10
9.2 billion from the prior fiscal year-end, to 65.6 billion, while the debt-to-equity ratio
a variety of fan appreciation events and active information dissemination.
20
400
CapitalCapital
Investm
In
Depreciation
Deprecia
an
10
Total
liabilities grew 4.2%, to 151.1 billion.300
The 300
major component of this increase was
In professional baseball, the Tokyo Yakult Swallows finished the regular season in the
profit rose 12.7%, to 0.7 billion.
15
In the fiscal year under review, capital investments expanded 34.3%, to 33.6 billion.
a rise in short-term borrowings of 11.8 billion. As a result, interest-bearing debt climbed
third
advancing to the Climax
for the second
organized
30.0 Series
30.0
6.0
60 place,
60
15
15 consecutive year. We 6.0

(Billions
(Billions
of yen)
of yen)
to the start of the Hyogo Miki
Plant
operation.
500
20
Investments
and other assets rose 19.8 500
billion,
or 23.9%, to 102.4 billion, mainly
because of increases in investment securities.
(Billions (Billions
of yen) to
of yen)
since the
foundation,
enhance customer satisfaction
(%)Companys
(%)
(%)
(%)
unchanged from the prior fiscal year.
7.5%
6.2%
1.1%
5.2%
23
(Billions
(Billions
of yen) of related
yen)
vehicles
effect of the Parabio series and advocating whitening properties of the Revecy White
Total Assets
Total Assets
and Equity
and Equity
(Excluding
(Excluding
Minority
Minority
Interests)
Interests)
Equity increased 14.5%, to 261.8 billion, from 228.6 billion a year earlier. This rise was
5
5
primarily
an
in retained
earnings 0from
income,
increase
FY 09 FYdue
09
10 to 10
11 increase
11
12 12
13
13
FY 0net
09FY
1009 1110an
1211
13
12 13in unrealized
Food
and
Food
Beverages
and
Beverages
(Japan) (Japan) securities reflecting the
Total
assets
Total assets
gain
on
available-for-sale
recovery
in the Japanese stock market, and
Food and
Food
Beverages
and Beverages
(Overseas)
(Overseas)
Equity (excluding
Equity (excluding
minorityminority
interests)
interests)
Pharmaceuticals
Pharmaceuticals
an increase
in foreign currency translation adjustments as the result of depreciation of yen.
Others Others
2.0
FY 009F
Capital investmen
Capital in
Depreciation
Deprecia
and
As a result, the equity ratio improved 2.2 percentage points, to 59.8%. Return on
equity (ROE) rose 0.9 percentage point, to 6.7%. Return on assets (ROA) increased 0.2
Total
assets
atnet
year-end
amounted to 438.2 billion,
climbing
year
on year.
Overseas
Overseas
net sales
(left
sales
scale)
(left scale)
Operating
Operating
income10.3%
income
(left scale)
(left
scale)
toRatio
total to
nettotal
sales
net(right
salesscale)
(right scale)
Operating
Operating
margin margin
scale)
(right scale)
Ratio
Current
assets
increased
7.5 billion, or 4.2%,
from
the(right
prior
fiscal year-end, to
percentage point, to 5.5%.
185.1 billion, principally due to a rise in cash and cash equivalents, despite a decrease
in inventories.
CASH FLOWS
Net property, plant and equipment advanced 13.6 billion, to 150.6 billion. This was
Net cash provided by operating activities was up 9.4 billion from the previous year, to
primarily due to increases in buildings and structures as well as machinery, equipment and
42.9 billion. This primarily reflected 27.9 billion in income before income taxes and
Total Assets
Total Assets
and Equity
and Equity
(Excluding
(Excluding
Minority
Minority
Interests)
Interests)
CapitalCapital
Investments
Investments
and and
Depreciation
Depreciation
and Amortization
and Amortization
Interest-Bearing
Interest-Bearing
Debt and
Debt and
Debt-to-Equity
Debt-to-Equity
Ratio Ratio
(Billions (Billions
of yen) of yen)
(Billions (Billions
of yen) of yen)
(Billions (Billions
of yen) of yen)
500
500
400
400
300
300
200
200
100
100
40
40
30
30
20
20
10
13
FY0 09FY 10
09 11
10 12
11 13
12 13
Total assets
Total assets
Equity (excluding
Equity (excluding
minorityminority
interests)
interests)
70
35
70
35
(%)
70
35
(%)
70
FY0 09FY 10
09 11
10 12
11 13
12
13
ANNUAL REPORT 2013
FY009 FY10
09 11
10 12
11 13
12 013
Interest-bearing
Interest-bearing
debt (leftdebt
scale)
(left scale)
Debt-to-equity
Debt-to-equity
ratio (right
ratioscale)
(right scale)
32
Dividends
Divid
(%)
(Yen)
(%)
(Yen)
10.0
10.0
25
25
8.0
8.0
20
20
6.0
6.0
15
15
4.0
4.0
10
10
2.0
2.0
FY 0
35
10
Capital Capital
investments
investments
Depreciation
and amortization
Depreciation
and amortization
ROE and
ROEROA
and ROA
FY 009 FY10
09 11
10 12
11 13
12 13
ROE ROE
ROA ROA
Note: ROA
is calculated
based on
operating
income.income.
Note:
ROA is calculated
based
on operating
Total Assets and Equity

(Excluding Minority Interests)
(Billions
of yen)
minority
500
Capital Investments and

Depreciation and Amortization
declared and paid an interim dividend of 11.5 per share, and the balance of 11.5 per
(Billionsand
of yen)amortization.
interests and 19.4 billion in depreciation
40
Net cash used in investing activities increased
15.3 billion, to 43.6 billion. Cash was
share will be distributed to our shareholders as the year-end dividend.

mainly used for purchases of property, plant and equipment, specifically for the new estab-
400
lishment and expansion of production facilities.

300
30
For the fiscal year ending March 31, 2014, we plan to continue to increase the annual
dividend by 1.0 to 24.0 in an effort to offer higher returns to shareholders.

Net cash provided by financing activities was 0.4 billion, an increase of 9.7 billion
from the previous fiscal year. This payment was20mainly attributable to the repayment of
Internal reserves will be used for investment of R&D and international business and
facility renewal projects designed to strengthen our corporate structure and enhance our
200
competitiveness.
lease obligations and the payment of dividends, despite a net increase in short-term loans.
10
In addition, foreign currency translation adjustments
amounted to 7.5 billion due to
100
FORWARD LOOKING STATEMENT
foreign exchange fluctuations.
0
cash
0 FY
As 09
a result,
10 11
12 and
13 cash equivalents at year-end
FY 09amounted
10 11 to
12 82.8
13 billion, a net
Total
assets
Capital
investments
increase of 7.2 billion from the previous fiscal year-end.
Equity (excluding minority interests)
FOOD AND BEVERAGES

In our domestic Probiotics business, we will continue to develop more robust activities in
Depreciation and amortization
both home delivery and retail store channels that underscore the value of the Lactobacillus
DIVIDENDS
casei strain Shirota and the enhanced Bifidobacterium breve strain Yakult.
We give top priority to the payment of a higher and stable dividend to shareholders by setting
the annual dividend at a base of 20.0 per share. The total dividend is decided based on
strategies around Yakult 400, Yakult 400LT and Mil-MilS, while centering sales efforts for
business performance for the year, after comprehensively taking into account the need for
the retail store channel on Yakult Ace targeting adults with greater awareness of good
funds for future business expansion and increasing earnings, as well as financial position.
health and Yakult products whose designs were renewed, such as Yakult, Yakult Calorie
Half and Yakult SHEs.
Based on the policy described above, we decided to pay a total dividend of 23 per
share, up 1 from the prior fiscal year to boost the return to shareholders. We have already
We will strive to generate higher sales for our home delivery channel by building sales
In juices and other beverages, we will aim to increase sales of products, namely, our
core brands Toughman, Bansoreicha, Kurozu Drink and Milouge, as well as nourish a
growing awareness and acceptance of the brand of our beauty health drink CHOBI.
Cash Flow
ROE Free
and ROA
(%)
70
(%)
(Billions of yen)
Dividends
term plan as a guiding framework.
(Yen)
10.0
20
25
8.0
15
20
6.0
10
15
4.0
10
higher profits.
5 09
FY 09
FY
10 10
11 11
12 12
13 13
In countries where we are gaining a foothold, such as Vietnam, India, China and the
United States, we will seek to strengthen our business base and drive business growth.
35
For existing business bases that have already established a local presence, we will
work to achieve further business growth, establish solid financial bases and generate

2.0
Overseas, we will develop operations with Yakult Vision 2020, our medium- to long-
Decisions to advance operations in new countries and regions will be made following
careful consideration of our internal and external business climate.
PHARMACEUTICALS
FY 09 10 11 12 13
In Japan, we will continue to encourage the proper use of Elplat and advocate the XELOX
ROE
ROA
Note: ROA is calculated based on operating income.
therapy through lectures and seminars for medical professionals to achieve further business
growth. Parallel to this, we will step up efforts to defend the market share of cancer chemotherapeutic agent Campto and expand sales channels for antineoplastic antimetabolite
ANNUAL REPORT 2013
33
products. The Group recognizes that this trend demands greater levels of safety and quality
Gemcitabine Yakult, in a drive to establish ourselves as a specialist in cancer treatments.

assurance for the products it handles, which are subject to Japans Food Sanitation Law,
Overseas, we will remain committed to further differentiating Campto from generic
products to maintain and expand market share.
Pharmaceutical Affairs Law, and other regulations. As a Group, we also strive to strengthen
OTHERS
In our cosmetics operations, we will continue to revitalize marketing activities, underscoring the
Groups food products could have an extremely adverse impact on our business results
our quality assurance system, with the provision of safe products as our highest priority.
These efforts notwithstanding, the unexpected occurrence of incidents related to the
value of basic skin care products, namely, our core brands Parabio, Revecy and Revecy White
and financial condition.
with a focus on home visits to counsel customers on cosmetics. Following the end of the fiscal
year under review, other measures aimed at increasing contacts with prospective customers
food products.
For this reason, every available step is taken to improve the safety and quality of our
and to drive sales growth will continue to include the selection of a featured product and a
3. Risks Pertaining to Raw Material Prices
special topic every quarter and activities to steadily enhance the existing product brands.
The Groups main products consist of dairy products and lactobacillus-based drinks.
BUSINESS RISKS
Sharp increases in procurement prices for the raw materials required for these products,
This section includes an explanation of business risks associated with business conditions,
due largely to market supply and demand, could impact manufacturing costs, including
accounting, and other factors stated in our securities report. This discussion will focus on
costs for containers and other packaging. Moreover, price increases in the crude oil
factors that may have a material impact on investor decisions.
market, especially those sustained over extended periods, could adversely affect transpor-
tation costs related to our products. In the event that we are unable to cover the effects of
Forward-looking statements contained herein are based on the Groups judgment as
higher raw material prices through cost reductions, or are prevented from enacting price
of the date of filing of our securities report.
revisions due to market conditions, these trends could have a tremendously adverse
1. Risks Accompanying Global Business Operations
impact on the Groups financial condition.
The Group conducts business operations worldwide, and is involved in production and
sales activities overseas. As these overseas business sites gain a stronger footing, the
risks related to unseasonable weather conditions and natural disasters. As such, the
proportion of overseas business results grows each year.
aforementioned risks are not an exhaustive list of those that could negatively impact the
Group business operations. The Group is aware of these risks, however, and strives to
This trend notwithstanding, consolidated business results as reported in the financial
In addition to the aforementioned, the Group faces a range of other risks, including the
mitigate or avoid their occurrence.
statements are affected by currency exchange rate fluctuations. Moreover, the regions
where the Group operates overseas include countries marked by political and economic
instability. While we work to mitigate these risks in various ways, there is no guarantee that
such risks can be completely avoided. Moreover, given the underlying differences of social
background between many overseas countries and regions and Japan, there is a risk that
the unforeseen establishment, amendment, or abolition of certain laws and regulations
could provoke problems with respect to Group business activities. The occurrence of such
issues could adversely impact our business performance and financial condition.
2. Risks Related to Product Safety
Growing concern regarding food safety and quality assurance among consumers today is
placing strong pressure on companies to provide unquestionably reliable and safe food
ANNUAL REPORT 2013
34
Consolidated Balance Sheet

March 31, 2013
Thousands of
U.S. dollars
(Note 1)
Millions of yen
2013
2012
2013
Current assets:
Cash and cash equivalents (Note 11) ........................ 82,773
75,559 $
7,803 3,561
890,038
83,903
Receivables (Note 11):

Notes and accounts receivable..............................
49,386
48,587
Associated companies...........................................
4,170
4,281
44,842
Other.....................................................................
2,052
3,335
22,065
531,030
295,001
Inventories (Note 3)....................................................
27,435
31,205
Deferred tax assets (Note 8).......................................
7,008
7,470
75,353
Other current assets..................................................
4,829 3,897
51,924
Allowance for doubtful accounts (Note 11).................

(323) (301) (3,478)
Total current assets........................................... 185,133
177,594
1,990,678
Long-term liabilities:
Long-term debt (Notes 5, 9 and 11)...........................
Liability for retirement benefits (Note 6).......................
Allowance for loss on plants reorganization................
Asset retirement obligations.......................................
Deferred tax liabilities (Note 8)....................................
Other long-term liabilities...........................................
Total long-term liabilities....................................
Property, plant and equipment:

38,148
34,003
410,195
Buildings and structures (Note 5)............................... 108,597
101,594
1,167,712
Machinery, equipment and vehicles............................ 109,119
98,802
1,173,326
Land (Note 5).............................................................
Furniture and fixtures.................................................
19,546
18,957
210,171
Lease assets (Note 9)................................................
19,281
22,410
207,324
Construction in progress............................................
11,955
14,314
128,543
Total.................................................................. 306,646
290,080
3,297,271
Net property, plant and equipment.................... 150,612
136,963
1,619,486
50,613
34,063
544,226
Investments in and advances to associated

companies (Note 11)...............................................
36,899
31,216
396,770
Long-term loans........................................................
504
584
5,415
Goodwill....................................................................
82
131
Deferred tax assets (Note 8) ......................................
2,066
Other assets..............................................................
12,267
11,349
131,902
Total investments and other assets................... 102,431
82,657
1,101,404
5,314
879
22,212
Total............................................................................. 438,176 397,214 $ 4,711,568

See notes to consolidated financial statements.
ANNUAL REPORT 2013
2013
6,174
47,796
17,359
18,219

638
856
807
1,781 1,791
3,689 3,738
29,859
72,989
66,388
186,657
9,205
19,144
39,668
321,062
Equity (Notes 7 and 15):

Common stock
authorized, 700,000,000 shares;
issued, 175,910,218 shares in 2013 and 2012...... 31,118
31,118
334,599
Capital surplus........................................................... 41,507
41,291
446,312
Retained earnings...................................................... 223,040 210,536 2,398,280
Treasury stockat cost
(7,659) (8,697) (82,352)
3,404,340 shares in 2013 and 3,831,586 shares in 2012....
Accumulated other comprehensive income:
Unrealized gain on available-for-sale securities............
6,472
511
69,585
Foreign currency translation adjustments............... (32,635) (46,132) (350,909)
Total.................................................................. 261,843 228,627 2,815,515
Minority interests........................................................ 25,256
23,616
271,567
Total equity....................................................... 287,099 252,243 3,087,082
Total ............................................................................. 438,176 397,214 $4,711,568
Investments and other assets:

Investment securities (Notes 4 and 11)......................
2012
Commitments and contingent liabilities (Note 9)
Accumulated depreciation (Note 5)............................ (156,034) (153,117) (1,677,785)

2013
LIABILITIES AND EQUITY

Current liabilities:
Short-term borrowings (Notes 5 and 11).................... 16,321 4,571 $ 175,496
463,667
Current portion of long-term debt (Notes 5, 9 and 11) ........... 43,121 4,061
Payables (Note 11):
Notes and accounts payable................................. 24,371
24,638
262,056
Associated companies ..........................................
92
127
993
Other.....................................................................
8,189
9,136
88,059
Income taxes payable (Note 8)...................................
2,730
1,440
29,355
Accrued expenses..................................................... 17,128
17,514
184,176
Allowance for loss on plants reorganization ...............
602
1,530
6,468
Deferred tax liabilities (Note 8)....................................
148
250
1,586
Other current liabilities................................................
8,516
8,715
91,568
Total current liabilities........................................ 121,218 71,982 1,303,424
ASSETS
Time deposits (Note 11).............................................
Thousands of
U.S. dollars
(Note 1)
Millions of yen
35
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income


Thousands of
U.S. dollars
(Note 1)
Millions of yen
2013
Millions of yen
2013
2012
Net sales...................................................................... 319,193 312,553 $3,432,184

Cost of sales (Notes 6, 9 and 14)................................... 147,544 142,522 1,586,497
Gross profit............................................................. 171,649 170,031 1,845,687
Selling, general and administrative
expenses (Notes 6, 9, 13 and 14)................................ 148,581 149,214 1,597,642
Operating income................................................... 23,068
20,817
248,045
8,019
490
8,509
19,428
6,928
1,640
8,568
17,380
86,223
5,276
91,499
208,902
Minority interests in net income......................................
3,049
4,088
32,782
Total comprehensive income attributed to:

Owners of the parent................................................. 35,837 6,041
Minority interests........................................................
5,583
190
Net income................................................................... 16,379 13,292 $ 176,120
Per share of common stock (Notes 2 (Q) and 16):

Basic net income.......................................................
Cash dividends applicable to the year........................
U.S. dollars
(Note 1)
Yen
95.03
23.00
77.32 $
22.00
1.02
0.25
Diluted net income per share of common stock for 2013 and 2012 was not calculated due to the absence of
dilutive securities.
ANNUAL REPORT 2013
2012
2013
Net income before minority interests....................... 19,428 17,380

$ 208,902
Other comprehensive income (Note 12):
Unrealized gain on
available-for-sale securities......................................
5,886 1,522
63,296
Foreign currency translation adjustments................... 16,147 (12,557) 173,621
Share of other comprehensive income
in associates............................................................
(41) (114) (443)
Total other comprehensive income................... 21,992 (11,149) 236,474
Comprehensive income............................................. 41,420 6,231
$ 445,376
Other income (expenses):

Interest and dividend income.....................................
3,107
3,092
33,413
Interest expense........................................................
(720) (696) (7,743)
Foreign exchange gain...............................................
654
1,513
7,035
Equity in earnings of associated companies...............
2,130 2,529
22,900
Valuation loss on investment securities (Note 4).........
(1,087) (1,187) (11,685)
Provision for loss on plants reorganization.................. (69)
Losses from a natural disaster................................... (1,056)
Reversal of allowance for loss on disasters................ 335
Refund of social insurance premium.......................... 1,437
Loss on impairment...................................................
(450) (370) (4,839)
Othernet (Note 4)....................................................
1,235
(397)
13,275
Other incomenet................................................
4,869 5,131
52,356
Income before income taxes and minority interests.... 27,937 25,948
300,401
Income taxes (Note 8):
Current......................................................................
Deferred....................................................................
Total income taxes.................................................
Net income before minority interests...........................
2013
Thousands of
U.S. dollars
(Note 1)
36
$ 385,347
60,029
Consolidated Statement of Changes in Equity

Millions of yen
Thousands
Accumulated other comprehensive (loss) income

Outstanding number
of shares of common
stock
Balance, April 1, 2011................................................
171,990
Common
stock
31,118
Capital
surplus
41,192
Retained
earnings
200,997
Treasury
stock
Unrealized (loss) gain

on availablefor-sale securities
(9,051)
(935)
Foreign currency
translation
adjustments
Minority
interests
Total
(37,435)
Net income..............................................................
13,292
225,886
Total equity
25,085
250,971
13,292
13,292
Surplus from disposal of treasury stock....................

99
99 99
Cash dividends, 22.0 per share..............................
(3,953)
(3,953)
(3,953)
Increase due to change in scope of consolidation....
200
200 200
Repurchase of treasury stock...................................
(138)
(205)
(205)
(205)
Other increase in treasury stock...............................
227
559
559
559
Net change in the year.............................................

1,446
(8,697)
(7,251)
(1,469)
(8,720)
Balance, March 31, 2012...........................................
172,079
31,118
41,291
210,536
(8,697)
511
(46,132)
228,627
23,616
252,243
Net income..............................................................
16,379
16,379
16,379
Surplus from disposal of treasury stock....................

216
216 216
Cash dividends, 23.0 per share..............................

(3,875)
(3,875)
(3,875)
Repurchase of treasury stock...................................
(27)
(80)
(80) (80)
Other increase in treasury stock...............................
454
1,118
1,118
1,118
Net change in the year.............................................

Balance, March 31, 2013........................................... 172,079 172,506
31,118
41,507
223,040
(7,659)
5,961
13,497
19,458
1,640
21,098
6,472
(32,635)
261,843
25,256
287,099
Thousands of U.S. dollars (Note 1)

Accumulated other comprehensive (loss) income
Common
stock
Balance, March 31, 2012.............................................................................. $334,599
Capital
surplus
$443,986
Retained
earnings
$2,263,831
Treasury
stock
Unrealized (loss) gain

on availablefor-sale securities
$(93,520)
Foreign currency
translation
adjustments
Total
Minority
interests
Total equity
$ 5,497
$(496,047)
$2,458,346
$253,944
$2,712,290
Net income.................................................................................................
176,120
176,120
176,120
Surplus from disposal of treasury stock....................................................... 2,326

2,326
2,326
Cash dividends, $0.25 per share.................................................................
(41,671)
(41,671)
(41,671)
Repurchase of treasury stock......................................................................
(855)
(855) (855)
Other increase in treasury stock..................................................................
12,023
12,023
12,023
Net change in the year ...............................................................................

64,088
145,138
209,226
17,623
226,849
$(350,909)
$2,815,515
$271,567
$3,087,082
Balance, March 31, 2013 ............................................................................. $334,599
$446,312
$2,398,280
$(82,352)
ANNUAL REPORT 2013
37
$69,585
Consolidated Statement of Cash Flows

Thousands of
U.S. dollars
(Note 1)
Millions of yen
2013
2012
2013
Operating activities:
Income before income taxes and minority interests.... 27,937 25,948 $ 300,401
Adjustments for:
Income taxespaid...............................................
(6,527) (9,159) (70,180)
Depreciation and amortization................................ 19,435
18,337
208,973
Loss on disposals and sales of property,
plant and equipment............................................
67
1,166
717
Equity in earnings of associated companies...........
(2,130) (2,529) (22,900)
Loss on valuation of investment securities..............
1,087
1,187
11,685
Changes in operating assets and liabilities:
Decrease (Increase) in receivables......................
607
(4,181)
6,528
Decrease (Increase) in inventories.......................
4,479
(4,170)
48,159
(Decrease) Increase in payables.........................
(823) 2,704
(8,845)
Decrease in liability for retirement benefits..........
(909) (920) (9,775)
Othernet.............................................................
(336) 5,062
(3,609)
Total adjustments....................................................... 14,950 7,497 160,753
Net cash provided by operating activities............... 42,887 33,445 461,154
2013
2012
2013
Financing activities:
Net increase in short-term loans................................ 11,465 1,928
123,277
Payments for settlement of long-term debt................
(4,384) (5,288) (47,139)
Repurchase of treasury stock....................................
(7) (1) (71)
Sales of treasury stock..............................................
1,413
581
15,196
Dividends paid...........................................................
(3,874) (3,945) (41,653)
Dividends paid to minority shareholders......................
(4,229)
(2,557)
(45,481)
Net cash provided by (used in) financing activities.......
384
(9,282)
4,129
Foreign currency translation adjustments
on cash and cash equivalents.................................
7,494
(6,723)
80,580
Net increase (decrease) in cash and
cash equivalents.......................................................
7,214
(10,856)
77,574
Cash and cash equivalents resulting from changing
scope of consolidation............................................. (172)
Cash and cash equivalents, increased by merger...... 36
Cash and cash equivalents, beginning of year........ 75,559 86,551
812,464
Cash and cash equivalents, end of year.................. 82,773 75,559 $ 890,038
Investing activities:
Transfers to time deposits.......................................... (18,393) (9,690) (197,779)
Proceeds from withdrawing time deposits.................. 14,749
8,446
158,598
Purchases of property, plant and equipment.............. (34,333)
(20,705)
(369,169)
Proceeds from sales of property, plant and equipment....
3,060
718
32,902
Purchases of investment securities............................
(8,677) (6,526)
(93,303)
Acquisition of controlling interest in companies..........
(23) (83) (242)
Increase in loans receivable.......................................
(56) (126) (605)
Collection of loans receivable.....................................
200
155
2,151
Othernet (Note 4)....................................................
(78) (485) (842)
Net cash used in investing activities....................... (43,551) (28,296) (468,289)
ANNUAL REPORT 2013
Thousands of
U.S. dollars
(Note 1)
Millions of yen
38
Notes to Consolidated Financial Statements

NOTE 1 BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
(B) Unification of Accounting Policies Applied to Foreign Subsidiaries

for the Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with
In May 2006, the Accounting Standards Board of Japan (the ASBJ) issued ASBJ Practical
the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related
Issues Task Force (PITF) No. 18, Practical Solution on Unification of Accounting Policies Applied
accounting regulations, and in accordance with accounting principles generally accepted in
to Foreign Subsidiaries for the Consolidated Financial Statements. PITF No. 18 prescribes that
Japan (Japanese GAAP), which are different in certain respects as to the application and
the accounting policies and procedures applied to a parent company and its subsidiaries for
disclosure requirements of International Financial Reporting Standards.

similar transactions and events under similar circumstances should in principle be unified for the
In preparing these consolidated financial statements, certain reclassifications and rearrange-
preparation of the consolidated financial statements. However, financial statements prepared by
ments have been made to the consolidated financial statements issued domestically in order
foreign subsidiaries in accordance with either International Financial Reporting Standards or the
to present them in a form which is more familiar to readers outside Japan. In addition, certain
generally accepted accounting principles in the United States of America tentatively may be
reclassifications have been made in the 2012 financial statements to conform to the classifica-
used for the consolidation process, except for the following items which should be adjusted in
tions used in 2013.

the consolidation process so that net income is accounted for in accordance with Japanese
The consolidated financial statements are stated in Japanese yen, the currency of the
GAAP unless they are not material: 1) amortization of goodwill; 2) scheduled amortization of
country in which YAKULT HONSHA CO., LTD. (the Company) is incorporated and operates.
actuarial gain or loss of pensions that has been directly recorded in equity; 3) expensing capitalized
The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the
development costs of R&D; 4) cancellation of the fair value model accounting for property, plant,
convenience of readers outside Japan and have been made at the rate of 93 to U.S.$1, the
and equipment and investment properties and incorporation of the cost model accounting; and
approximate rate of exchange at March 31, 2013. Such translations should not be construed as
5) exclusion of minority interests from net income, if contained in net income.
representations that the Japanese yen amounts could be converted into U.S. dollars at that or
any other rate.
(C) Unification of Accounting Policies Applied to Foreign Associated
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In March 2008, the ASBJ issued ASBJ Statement No. 16, Accounting Standard for Equity
(A) Consolidation
Method of Accounting for Investments. The accounting standard requires adjustments to be
The consolidated financial statements as of March 31, 2013 include the accounts of the
made to conform the associates accounting policies for similar transactions and events under
Company and its 79 (79 in 2012) subsidiaries (together, the Group).
similar circumstances to those of the parent company when the associates financial statements
Under the control or influence concept, those companies in which the Company, directly or
are used in applying the equity method unless it is impracticable to determine adjustments. In
indirectly, is able to exercise control over operations are fully consolidated, and those companies
addition, financial statements prepared by foreign associated companies in accordance with
over which the Group has the ability to exercise significant influence are accounted for by the
either International Financial Reporting Standards or the generally accepted accounting principles
equity method.
in the United States of America tentatively may be used in applying the equity method if the
Investments in 4 associated companies (4 in 2012) are accounted for by the equity method.
following items are adjusted so that net income is accounted for in accordance with Japanese
Companies for the Equity Method
Investments in the remaining associated companies are stated at cost. If the equity method of
GAAP unless they are not material: 1) amortization of goodwill; 2) scheduled amortization of
accounting had been applied to the investments in these companies, the effect on the accompanying
actuarial gain or loss of pensions that has been directly recorded in equity; 3) expensing capitalized
consolidated financial statements would not be material.
development costs of R&D; 4) cancellation of the fair value model accounting for property, plant,
and equipment and investment properties and incorporation of the cost model accounting; and
The excess of the cost of an acquisition over the fair value of the net assets of the acquired
5) exclusion of minority interests from net income, if contained in net income.
subsidiaries at the date of acquisition is being amortized on a straight-line basis over 10 years.

All significant intercompany balances and transactions have been eliminated in consolidation. All
material unrealized profit included in assets resulting from transactions within the Group is eliminated.
ANNUAL REPORT 2013
39
(D) Business Combination
Foreign subsidiaries
In December 2008, the ASBJ issued a revised accounting standard for business combinations,
Buildings and structures
ASBJ Statement No. 21, Accounting Standard for Business Combinations. Major accounting
Machinery, equipment and vehicles 3 to 21 years
changes under the revised accounting standard are as follows: (1) The revised standard requires
3 to 40 years
The useful lives for leased assets are the terms of the respective leases.
accounting for business combinations only by the purchase method. As a result, the pooling of
As for property, plant and equipment which were acquired on or after April 1, 2012, the
interests method of accounting is no longer allowed. (2) The previous accounting standard
Company and its domestic subsidiaries have changed the depreciation method to the method
required research and development costs to be charged to income as incurred. Under the
based on the Japanese renewed corporate income tax law.
revised standard, in-process research and development costs (IPR & D) acquired in the business
combination are capitalized as an intangible asset. (3) The previous accounting standard
income before income taxes and minority interests for the year ended on March 31, 2013, increased
provided for a bargain purchase gain (negative goodwill) to be systematically amortized over a
by 498 million ($5,358 thousand) and 500 million ($5,373 thousand), respectively.
Due to the change mentioned above, compared to the previous method, operating income and
period not exceeding 20 years. Under the revised standard, the acquirer recognizes the bargain
purchase gain in profit or loss immediately on the acquisition date after reassessing and
(H) Long-lived assets
confirming that all of the assets acquired and all of the liabilities assumed have been identified
The Group reviews its long-lived assets for impairment whenever events or changes in circumstance
after a review of the procedures used in the purchase price allocation. The revised standard was
indicate the carrying amount of an asset or asset group may not be recoverable. An impairment
applicable to business combinations undertaken on or after April 1, 2010.
loss would be recognized if the carrying amount of an asset or asset group exceeds the sum of
the undiscounted future cash flows expected to result from the continued use and eventual
(E) Cash Equivalents
disposition of the asset or asset group. The impairment loss would be measured as the amount
Cash equivalents are short-term investments that are readily convertible into cash and that are
by which the carrying amount of the asset exceeds its recoverable amount, which is the higher
exposed to insignificant risk of changes in value.
of the discounted cash flows from the continued use and eventual disposition of the asset or the
net selling price at disposition.
Cash equivalents include time deposits, certificate of deposits, commercial paper and bond
funds, all of which mature or become due within three months of the date of acquisition.
( I ) Investment Securities
(F) Inventories
The Group classifies all securities as available-for-sale securities, and reports marketable securities at fair
Inventories are stated at the lower of cost, mainly determined by the moving average method, or
value, with unrealized gains and losses (net of applicable taxes) as a separate component of equity.
net selling value.
Nonmarketable available-for-sale securities are stated at cost determined by the moving-
average method. For other-than-temporary declines in fair value, investment securities are
(G) Property, Plant and Equipment
reduced to net realizable value by a charge to income.
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment
of the Company and its domestic subsidiaries is mainly computed by the declining-balance
(J) Retirement and Pension Plans
method based on the estimated useful lives of assets. On the other hand, the straight-line
The Company and certain subsidiaries have noncontributory and contributory funded pension plans
method is principally applied to the property, plant and equipment of foreign subsidiaries.
covering substantially all of their employees. Certain subsidiaries have unfunded retirement benefit plans.
Estimated useful lives are as follows:
The Company and its domestic subsidiaries
iaries are provided at the amount which would be required if all Directors and Audit & Supervisory
Buildings and structures
Board Members retired at each balance sheet date.
7 to 50 years
Retirement benefits to Directors and Audit & Supervisory Board Members of certain subsid-
Machinery, equipment and vehicles 4 to 17 years
ANNUAL REPORT 2013
40
(K) Asset Retirement Obligations
(O) Foreign Currency Transactions
In March 2008, the ASBJ published the accounting standard for asset retirement obligations,
All short-term and long-term monetary receivables and payables denominated in foreign currencies
ASBJ Statement No. 18, Accounting Standard for Asset Retirement Obligations and ASBJ
are translated into Japanese yen at the exchange rates at the balance sheet date. The foreign
Guidance No. 21, Guidance on Accounting Standard for Asset Retirement Obligations.
exchange gains and losses from translation are recognized in the consolidated statement of
Under this accounting standard, an asset retirement obligation is defined as a legal obligation
income to the extent that they are not hedged by forward exchange contracts.
imposed either by law or contract that results from the acquisition, construction, development
and the normal operation of a tangible fixed asset and is associated with the retirement of
(P) Foreign Currency Financial Statements
such tangible fixed asset. The asset retirement obligation is recognized as the sum of the
The balance sheet accounts of the foreign subsidiaries are translated into Japanese yen at the
discounted cash flows required for the future asset retirement and is recorded in the period in
current exchange rate as of the balance sheet date except for equity, which is translated at the
which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate
historical rate.
Differences arising from such translation are shown as Foreign currency translation adjust-
of the asset retirement obligation cannot be made in the period the asset retirement obligation
is incurred, the liability should be recognized when a reasonable estimate of the asset retirement
ments under accumulated other comprehensive income in a separate component of equity.
obligation can be made. Upon initial recognition of a liability for an asset retirement obligation,
an asset retirement cost is capitalized by increasing the carrying amount of the related fixed
translated into Japanese yen at the average exchange rate.
Revenue and expense accounts of foreign subsidiaries and associated companies are
asset by the amount of the liability. The asset retirement cost is subsequently allocated to
expense through depreciation over the remaining useful life of the asset. Over time, the
(Q) Per Share Information
liability is accreted to its present value each period. Any subsequent revisions to the timing
Basic net income per share is computed by dividing net income available to common share-
or the amount of the original estimate of undiscounted cash flows are reflected as an adjust-
holders by the weighted-average number of common shares outstanding for the period,
ment to the carrying amount of the liability and the capitalized amount of the related asset
retroactively adjusted for stock splits.
retirement cost.
Diluted net income per share for the years ended March 31, 2013 and 2012, is not disclosed
due to the absence of dilutive securities.

(L) Research and Development Costs
Research and development costs are charged to income as incurred.
are dividends applicable to the respective years including dividends to be paid after the end of
Cash dividends per share presented in the accompanying consolidated statement of income
the year.
(M) Leases
All finance lease transactions are capitalized to recognize lease assets and lease obligations in
(R) Accounting ChANGES AND ERROR CORRECTIONS
the balance sheet. All other leases are accounted for as operating leases.
In December 2009, ASBJ issued ASBJ Statement No. 24, Accounting Standard for Accounting
Changes and Error Corrections, and ASBJ Guidance No. 24, Guidance on Accounting
(N) Income Taxes
Standard for Accounting Changes and Error Corrections. Accounting treatments under this
The provision for income taxes is computed based on the pretax income included in the consoli-
standard and guidance are as follows:
dated statement of income. The asset and liability approach is used to recognize deferred tax
(1) Changes in Accounting Policies:

When a new accounting policy is applied with following revision of an accounting stan-
assets and liabilities for the expected future tax consequences of temporary differences between
the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by
dard, the new policy is applied retrospectively unless the revised accounting standard
applying currently enacted tax laws to the temporary differences.
includes specific transitional provisions, in which case the entity shall comply with the
specific transitional provisions.

ANNUAL REPORT 2013
41
(2) Changes in Presentation
to the discount rate and expected future salary increases.
When the presentation of financial statements is changed, prior period financial state-
The revised accounting standard also made certain amendments relating to the method of
ments are reclassified in accordance with the new presentation.

attributing expected benefit to periods and relating to the discount rate and expected future
(3) Changes in Accounting Estimates
salary increases.
A change in an accounting estimate is accounted for in the period of the change if the
change affects that period only, and is accounted for prospectively if the change affects
both the period of the change and future periods.
periods beginning on or after April 1, 2013, and for (3) above are effective for the beginning of annual
(4) Corrections of Prior Period Errors
This accounting standard and the guidance for (1) and (2) above are effective for the end of annual
periods beginning on or after April 1, 2014, or for the beginning of annual periods beginning on or after
When an error in prior period financial statements is discovered, those statements are restated.
April 1, 2005, subject to certain disclosure in March 2015, both with earlier application being permitted
from the beginning of annual periods beginning on or after April 1, 2013. However, no retrospective
(S) NEW Accounting PRONOUnCEMENTS
application of this accounting standard to consolidated financial statements in prior periods is required.
Accounting Standard for Retirement Benefits
The Company expects to apply the revised accounting standard for (1) and (2) above from the end of
On May 17, 2012, the ASBJ issued ASBJ Statement No. 26, Accounting Standard for Retirement Benefits
the annual period beginning on April 1, 2013, and for (3) above from the beginning of the annual period
and ASBJ Guidance No. 25, Guidance on Accounting Standard for Retirement Benefits, which replaced the
beginning on April 1, 2014, and is in the process of measuring the effects of applying the revised
Accounting Standard for Retirement Benefits that had been issued by the Business Accounting Council in 1998
accounting standard in future applicable periods.
with an effective date of April 1, 2000, and the other related practical guidances, and followed by partial amendments from time to time through 2009.

Major changes are as follows:
(1) Treatment in the balance sheet
NOTE 3 INVENTORIES
Inventories at March 31, 2013 and 2012, consisted of the following:
Under the current requirements, actuarial gains and losses and past service costs that are yet to
retirement benefit obligations and plan assets (hereinafter, deficit or surplus), adjusted by such
2013
Merchandise and finished products............................... 7,523
unrecognized amounts, is recognized as a liability or asset.

Thousands of
U.S. dollars
Millions of yen
be recognized in profit or loss are not recognized in the balance sheet, and the difference between
Under the revised accounting standard, actuarial gains and losses and past service costs that
are yet to be recognized in profit or loss shall be recognized within equity (accumulated other
2013
$ 80,890
Work in process............................................................
2,235 5,117
24,035
Raw materials and supplies...........................................
17,677 16,266
190,076
Total.................................................................. 27,435
comprehensive income), after adjusting for tax effects, and any resulting deficit or surplus shall be
2012
9,822
31,205
$295,001
recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).
NOTE 4 INVESTMENT SECURITIES
(2) Treatment in the statement of income and the statement of comprehensive income
The revised accounting standard does not change how to recognize actuarial gains and losses and
Investment securities at March 31, 2013 and 2012, consisted of the following:
past service costs in profit or loss. Those amounts would be recognized in profit or loss over a

However, actuarial gains and losses and past service costs that arose in the current period and have
2013
2012
2013
Investment securities:
not yet been recognized in profit or loss shall be included in other comprehensive income and
Marketable equity securities....................................... 48,806 33,145
actuarial gains and losses and past service costs that were recognized in other comprehensive
$524,800
Government and corporate bonds............................. 5
income in prior periods and then recognized in profit or loss in the current period shall be treated as
913
19,426
Total....................................................................... 50,613 34,063
$544,226
Trust fund investments and other...............................
reclassification adjustments.
(3) Amendments relating to the method of attributing expected benefit to periods and relating
ANNUAL REPORT 2013
Thousands of
U.S. dollars
Millions of yen
certain period no longer than the expected average remaining working lives of the employees.
42
1,807
NOTE 5 SHORT-TERM borrowings AND LONG-TERM DEBT
The costs and aggregate fair values of investment securities at March 31, 2013 and 2012,
were as follows:
Short-term borrowings mainly consisting of bank loans, which include notes to banks and bank
Millions of yen
Unrealized
Gains
Cost
Unrealized
Losses
overdrafts, at March 31, 2013 and 2012, were 16,321 million ($175,496 thousand) and 4,571
Fair Value
million, respectively. The annual interest rates applicable to short-term bank loans outstanding at
March 31, 2013
March 31, 2013 and 2012, ranged from 0.01% to 8.65% and 0.01% to 15.91%, respectively.
Securities classified as
Available-for-sale:
Equity securities..................................
40,412 11,059 2,665 48,806
Other..................................................
1
1
Long-term debt at March 31, 2013 and 2012, consisted of the following:
2013
Collateralized.........................................................
Available-for-sale:
Unsecured.............................................................
33,970
3,146
3,971
2013
2012
Loans from banks and other financial institutions,

0.65% to 2.45% (0.42% to 2.45% in 2012),
due serially to 2025:
March 31, 2012
Equity securities..................................
Thousands of
U.S. dollars
Millions of yen
578
898
6,211
41,658 41,992 447,940
33,145
Obligations under finance leases (Note 9)......................
7,059 8,967 75,904
Debt securities....................................
5
5
Total..................................................................
49,295 51,857 530,055
Other..................................................
7
7
Less current portion....................................................... (43,121) (4,061) (463,667)

Long-term debt, less current portion............................. 6,174 47,796 $ 66,388
Thousands of U.S. dollars

Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Annual maturities of long-term debt as of March 31, 2013, were as follows:
Year ending March 31
March 31, 2013
Millions of yen
Thousands of
U.S. dollars
2014.............................................................................
43,121
$463,667
Available-for-sale:
2015.............................................................................
2,368
25,465
Equity securities.................................. $434,542 $118,917 $28,659 $524,800
2016.............................................................................
1,697
18,247
3
3
2017.............................................................................
1,058
11,377
2018.............................................................................
380
4,085
2019 and thereafter.......................................................
671
Other..................................................

Available-for-sale securities whose fair value cannot be reliably determined at March 31,
2013 and 2012, were 1,806 million ($19,423 thousand) and 906 million, respectively.

Total..................................................................
Proceeds from sales of available-for-sale securities for the years ended March 31, 2013 and
2012, were 366 million ($3,934 thousand) and 14 million, respectively. Gross realized gain on
these sales for the years ended March 31, 2013 and 2012, computed on the moving average
were as follows:
cost basis, were 129 million ($1,390 thousand) and 0 million, respectively. Gross realized losses
49,295
7,214
$530,055
The carrying amounts of assets pledged as collateral for long-term debt at March 31, 2013,
March 31, 2013
Millions of yen
Thousands of
U.S. dollars
on these sales for the years ended March 31, 2013 and 2012, were 4 million ($40 thousand) and
Land..............................................................................
8 million, respectively.
Buildings and structuresnet of accumulated

depreciation.................................................................
1,491
16,035
Total..................................................................
5,696
$61,247
The valuation loss on available-for-sale equity securities for the years ended March 31, 2013
and 2012, were 1,087 million ($11,685 thousand) and 1,187 million, respectively.
ANNUAL REPORT 2013
43
4,205
$45,212
As is customary in Japan, the Company maintains substantial deposit balances with the banks
with which it has borrowings. Such deposit balances are not legally or contractually restricted as to
The components of net periodic retirement benefit costs for the years ended March 31,
2013 and 2012, were as follows:
withdrawal. General agreements with respective banks provide, as is customary in Japan, that
Thousands of
U.S. dollars
Millions of yen
additional collateral must be provided under certain circumstances if requested by such banks
and that certain banks have the right to offset cash deposited with them against any long-term
Service cost...................................................................
2,363 2,515 $25,406
or short-term debt or obligation that becomes due and, in case of default and certain other
Interest cost..................................................................
1,053 1,121 11,320
2013
2012
2013
specified events, against all other debt payable to the banks. The Company has never been
Expected return on plan assets.....................................
(842) (793) (9,052)
requested to provide any additional collateral.
Recognized actuarial loss..............................................
1,500 1,249 16,134
Net periodic retirement benefit costs.............................
4,074 4,092 $43,808
NOTE 6 RETIREMENT AND PENSION PLANS
Assumptions used for the years ended March 31, 2013 and 2012, were as follows:
The Company and certain subsidiaries have severance payment plans for employees. Certain
subsidiaries have severance payment plans for Directors and Audit & Supervisory Board Members.

The plans provide benefits based on the rate of pay at the time of termination, years of service
and certain other factors. Such retirement benefits are made in the form of a lump-sum severance
payment from the Company or from certain subsidiaries and annuity payments from a trustee.
Employees are entitled to larger payments by voluntary retirement at certain specific ages prior
2013
2012
Discount rate....................................................................................
1.4%
1.8%
Expected rate of return on plan assets.............................................
2.5%
2.5%
Recognition period of actuarial gain/loss........................................... 10 years
10 years
to the mandatory retirement age. The liability for retirement benefits at March 31, 2013 and
NOTE 7 EQUITY
2012, included the amounts of 348 million ($3,744 thousand) and 356 million, respectively, for
Japanese companies are subject to the Companies Act of Japan (the Companies Act). The significant
Directors and Audit & Supervisory Board Members. The retirement benefits for Directors and
provisions in the Companies Act that affect financial and accounting matters are summarized below:
Audit & Supervisory Board Members are paid subject to the approval of the shareholders.

(A) Dividends
The Company and certain subsidiaries have various noncontributory and contributory plans
and other retirement benefit plans.
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition
to the year-end dividend upon resolution at the shareholders meeting. For companies that meet
The liability (asset) for employees retirement benefits at March 31, 2013 and 2012, consisted
certain criteria such as (1) having the Board of Directors, (2) having independent auditors, (3) having
of the following:
Millions of yen
2013
the Audit & Supervisory Board, and (4) the term of service of the Directors is prescribed as one year
Thousands of
U.S. dollars
2012
Projected benefit obligation........................................... 64,821 61,310
2013
rather than two years of normal term by its articles of incorporation, the Board of Directors may de-
$ 697,004
clare dividends (except for dividends in kind) at any time during the fiscal year if the company has
prescribed so in its articles of incorporation. The Company meets all the above criteria.
Fair value of plan assets................................................ (41,489) (34,968) (446,131)

(6,365) (8,502) (68,437)
Net liability.................................................................
16,967 17,840 182,436
Directors if the articles of incorporation of the company so stipulate. The Companies Act provides
Prepaid pension cost.....................................................
44 23 477
certain limitations on the amounts available for dividends or the purchase of treasury stock. The
Unrecognized actuarial loss...........................................
Liability for employees retirement benefits..................... 17,011
17,863
Semiannual interim dividends may also be paid once a year upon resolution by the Board of
limitation is defined as the amount available for distribution to the shareholders, but the amount
$ 182,913
of net assets after dividends must be maintained at no less than 3 million.
ANNUAL REPORT 2013
44
NOTE 8 INCOME TAXES
(B) Increases/decreases and transfer of common stock, reserve and

surplus
The Company and its domestic subsidiaries are subject to Japanese national and local income
The Companies Act requires that an amount equal to 10% of dividends must be appropriated
taxes which, in the aggregate, resulted in a normal statutory tax rate of approximately 38.01%
as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component
and 40.69% for the years ended March 31, 2013 and 2012, respectively. Foreign subsidiaries
of capital surplus), depending on the equity account that was charged upon the payment of
are subject to income taxes of the countries in which they operate.
such dividends, until the total aggregate amount of the legal reserve and additional paid-in
capital equals 25% of the common stock. Under the Companies Act, the total amount of additional
The tax effects of significant temporary differences and tax loss carryforwards which resulted
in deferred tax assets and liabilities at March 31, 2013 and 2012, were as follows:
paid-in capital and legal reserve may be reversed without limitation. The Companies Act also
provides that common stock, legal reserve, additional paid-in capital, other capital surplus and
Thousands of
U.S. dollars
Millions of yen
retained earnings can be transferred among the accounts under certain conditions upon resolu-
tion of the shareholders.
Deferred tax assets:
2013
Pension and severance costs.................................... 6,071
2012
6,414
2013
$ 65,277
(C) Treasury stock and treasury stock acquisition rights
Tax loss carryforwards...............................................
4,923 4,761 52,938
The Companies Act also provides for companies to purchase treasury stock and dispose of such
Other
.........................................................................
13,178 16,122 141,701
treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased
Less valuation allowance...........................................
(6,414) (9,627) (68,967)
cannot exceed the amount available for distribution to the shareholders which is determined by
Total....................................................................... 17,758 17,670 $190,949
a specific formula. Under the Companies Act, stock acquisition rights are presented as a separate
Deferred tax liabilities:
component of equity. The Companies Act also provides that companies can purchase both
Undistributed earnings of foreign subsidiaries

and associated companies...................................... 3,130
treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are
presented as a separate component of equity or deducted directly from stock acquisition rights.
2,503
$ 33,653
Unrealized gain on land held by subsidiaries..............
1,715 1,855 18,439
Other
.........................................................................
5,768 2,569 62,022
Total....................................................................... 10,613
6,927
$114,114
Net deferred tax assets.................................................. 7,145 10,743 $ 76,835
ANNUAL REPORT 2013
45
NOTE 9 LEASES
A reconciliation between the normal statutory tax rate and the effective tax rate reflected in
the accompanying consolidated statement of income for the years ended March 31, 2013 and
The Group leases certain machinery, research apparatus, vending machines, computer
2012, was as follows:

Normal statutory tax rate...........................................................
38.01%
Equity in earnings of associated companies...............................
(2.90)
(2.85)
Tax exemption...........................................................................
(1.52)
(2.00)
Social expenses not deductible for income tax purposes...........
2.31
1.48
Tax rate differences in foreign subsidiaries.................................
(9.08)
(9.99)
40.69%
Effect of revised corporate tax rate............................................
3.64
2.27
Effective tax rate........................................................................

30.46%
33.02%
Obligations under finance leases and future minimum payments under noncancelable
operating leases were as follows:

Millions of yen
Finance
leases
Due within one year....................................

Due after one year......................................
719
2012
Due within one year....................................
will expire as follows:
Operating
leases
3,513
Due after one year...................................... 5,454

Millions of yen
688
Thousands of
U.S. dollars
156
1,677
2016.............................................................................
644
6,921
2017.............................................................................
99
1,070
971
10,439
2019 and thereafter.......................................................
14,291
153,671
Total..................................................................
16,849
$181,172
ANNUAL REPORT 2013
606
990
Total............................................... 8,967 1,596
7,394
2015.............................................................................
Finance
leases
$28,902
Operating
leases
$ 7,736
4,371 1,140 47,002 12,254
Finance
leases
taxable income of such subsidiaries in future years. These tax loss carryforwards, if not utilized,
2018.............................................................................
2,688
Millions of yen
approximately 16,849 million ($181,172 thousand), which were available to be offset against
2014.............................................................................
2013
Operating
leases
Total............................................... 7,059 1,859 $75,904 $19,990
At March 31, 2013, certain subsidiaries had tax loss carryforwards aggregating to
Year ending March 31
2013
3.42
Othernet................................................................................
equipment and other assets.
2013
2012
46
NOTE 10 RELATED PARTY DISCLOSURES
(2) Nature, extent of risk and risk management system for financial
instruments
Transactions of the Company with related parties which are owned by Directors, Audit & Supervisory
Notes and accounts receivable are exposed to customer credit risk. To manage such credit risk,
Board Members and their close relatives for the years ended March 31, 2013 and 2012, were as follows:

2013
the Group monitors payment terms and credit information of major customers. Investment
Thousands of
U.S. dollars
Millions of yen
securities, mainly held for business-related purposes, are exposed to the risk of market price
2013
2012
Sales.............................................................................
4,296 9,997 $46,195
Sales discount and rebate.............................................
31 132 328
fluctuations. To manage such market risk, the fair value of the investments are obtained regularly
and reported to the Companys Board of Directors.
Purchases..................................................................... 43
Collection of loans......................................................... 37
Rent of vending machines.............................................
11 60 117
Temporary receipt..........................................................
898 1,551 9,660
Subsidy of sales expenses.............................................
10 98 110
Sale of fixed assets .......................................................
20
215
Rent of leased assets....................................................
23
243
2013
the financial market situation and outstanding balance.

Notes and accounts receivable......................................
955 1,936 $10,265

3 13 31
Long-term loans............................................................
35 81 376
Payables and loans are exposed to liquidity risk. The Group manages the risk by reviewing
cash flow projections prepared by the accounting and related departments.

(3) Fair values of financial instruments
Fair value of financial instruments are based on the quoted price in active markets. If quoted price
is not available, other rational valuation techniques are used instead. The result of estimation
2013
Other receivables...........................................................
Loans are made principally in connection with capital investments. Most of the loans are at
not to hedge such market risk by derivatives such as interest-rate swaps as a result of considering
Thousands of
U.S. dollars
2012
Payment terms of notes and accounts payable are usually within one year.
variable interest rates and exposed to the risk of interest rate fluctuations. It is the Group policy
The balances due to or from these related parties at March 31, 2013 and 2012, were as follows:
Millions of yen
might differ if other valuation techniques were taken.

Millions of yen
Carrying
amount
Notes and accounts payable......................................... 10
Fair Value
March 31, 2013
Other payables..............................................................
9 46 96
Cash and cash equivalents...........................................
Accrued expenses.........................................................
1 19
Time deposits...............................................................
Other current liabilities...................................................
0 2 4
Receivables..................................................................
55,608
Allowance for doubtful accounts...............................
(323)
Receivablesnet......................................................
55,285
55,285
Investment securities....................................................
48,807
48,807
Transactions of the Company with a member of Audit & Supervisory Board and his close relatives for the years ended March 31, 2013 and 2012, were as follows:
Thousands of
U.S. dollars
Millions of yen
2013
2012
Unrealized
gain/loss
2013
82,773 82,773
7,803
7,803
Total.................................................................
194,668 194,668
Short-term borrowings.................................................
16,321 16,321
Acquisition of shares owned.......................................... 151
NOTE 11 Financial Instruments and Related Disclosures
Payables.......................................................................
32,652
32,652
(1) Group policy for financial instruments
Long-term debt
(exclude obligations under finance leases)..................
42,236
42,357
121
91,209 91,330
121
The Group uses bank loans based on its capital investment plan mainly for the food and beverages business.

Total.................................................................
Temporal surplus funds are invested in short-term investments exposed to an insignificant risk
of changes in value such as bank deposits. The Group does not invest in speculative instruments
in compliance with the Group policy.
ANNUAL REPORT 2013
47
Cash and cash equivalents, Time deposits and Receivables
Millions of yen
Carrying
amount
Fair Value
Unrealized
gain/loss
The carrying values of cash and cash equivalents, time deposits and receivables approximate
fair value because of their short maturities.
March 31, 2012

Cash and cash equivalents...........................................
75,559 75,559
Time deposits...............................................................
3,561
Investment securities
3,561
The fair values of investment securities are measured at the quoted market price of the stock
Receivables.................................................................. 56,203
exchange for the equity instruments, and at the quoted price obtained from the financial
Allowance for doubtful accounts............................... (301)

Receivablesnet......................................................
55,902
55,902
institution for certain debt instruments. The information on the fair value for the investment
33,157
33,157
securities by classification is included in Note 4.
Total.................................................................
168,179 168,179
Short-term borrowings.................................................
Short-term borrowings and Payables (excluding current portion of long-term debt)

Payables.......................................................................
Long-term debt
Total.................................................................
4,571
The carrying values of short-term borrowings and payables (excluding current portion of long-
4,571
term debt) approximate fair value because of their short maturities.
33,901
33,901
42,890
43,020
130
Long-term debt (including current portion of long-term debt)
81,362 81,492
130
The fair value of long-term borrowings are determined by discounting the cash flows related to
the debt at the Groups assumed corporate discount rate.
(4) Financial instruments whose fair value cannot be reliably determined

Carrying
amount
Fair Value
Carrying amount
Unrealized
gain/loss
Thousands of
U.S. dollars
Millions of yen
March 31, 2013
Cash and cash equivalents........................................... $ 890,038 $ 890,038
Investments in equity instruments that

do not have a quoted market price
in an active market and investments in
associated companies..................................................... 38,705 32,122 $416,193
Time deposits...............................................................
Receivables..................................................................
83,903
83,903
597,937
Allowance for doubtful accounts...............................
(3,478)
Receivablesnet......................................................
594,459
594,459
524,803
524,803
Long-term debt
454,151
2013
Millions of yen
Due in 1
year or less
March 31, 2013
Short-term borrowings................................................. $ 175,496 $ 175,496

351,108
2012
(5) Maturity analysis for financial assets
Total................................................................. $2,093,203 $2,093,203
Payables.......................................................................
2013
Cash and cash equivalents......................... 82,773
351,108
Time deposits.............................................
7,803
55,608
455,454
$1,303
Receivables................................................
Total................................................................. $ 980,755 $ 982,058
$1,303
Total............................................... 146,184
ANNUAL REPORT 2013
48
Due after 1
year through
5 years
Due after 5
years through
10 years
Due after
10 years
Millions of yen
Due in 1
year or less
Due after 1
year through
5 years
Due after 5
years through
10 years
Due after
10 years
Cash and cash equivalents......................... 75,559

3,561
Receivables................................................
56,203
2013
108
Income tax effect.......................................................
Due after 1
year through
5 years
Due after 5
years through
10 years
Due after
10 years
March 31, 2013
Receivables................................................
597,937
2013
2012
Share of other comprehensive income in associates:

Gain arising during the year.......................................
103
Reclassification adjustments to profit or loss..............
(144) (150)
Total..................................................................
Cash and cash equivalents......................... $ 890,038

83,903
2013
$173,621
Thousands of
U.S. dollars
Millions of yen
Time deposits.............................................
1,160
Total ................................................................. 16,147 (12,557)
Total............................................... 135,323
Due in 1
year or less
2013
2012
Foreign currency translation adjustments:

Gain arising during the year....................................... 16,039 (12,557) $172,461
March 31, 2012

Time deposits.............................................
Thousands of
U.S. dollars
Millions of yen
(41)
36
(114)
Total other comprehensive income ............................... 21,992 (11,149)
1,105
(1,548)
(443)
$236,474
NOTE 13 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Total............................................... $1,571,878
The components of selling general and administrative expenses for the years ended March 31,
NOTE 12 COMPREHENSIVE INCOME
2013 and 2012, were as follows:

Millions of yen
The components of other comprehensive income for the years ended March 31, 2013 and 2012, were
as follows:
2013
2012
Salaries .........................................................................
NOTE 14 RESEARCH AND DEVELOPMENT COSTS
988
Amount before income tax effect...............................
9,144
2,447 98,327
Income tax effect.......................................................
(3,258)
(925) (35,031)
Total.................................................................. 5,886
1,522
29,943 29,284 321,963
$ 87,704
Reclassification adjustments to profit or loss..............
1,171
2013
2013
Unrealized gain on available-for-sale securities:

Gain arising during the year....................................... 8,156 1,276
2012
Advertising.................................................................... 10,843 11,679 $116,588
Thousands of
U.S. dollars
Millions of yen
2013
Thousands of
U.S. dollars
10,623
Research and development costs charged to income were 10,761 million ($115,708 thousand)
and 12,414 million for the years ended March 31, 2013 and 2012, respectively.
NOTE 15 SUBSEQUENT EVENT
$ 63,296
The following appropriation of retained earnings at March 31, 2013, was approved at the
Companys Board of Directors meeting held on May 10, 2013:
Millions of yen
Year-end cash dividends, 11.5 ($0.12) per share.........

ANNUAL REPORT 2013
49
Thousands of
U.S. dollars
1,985 $21,341
NOTE 16 NET INCOME PER SHARE
how resources are allocated among the Group. Therefore, the Group consists of the Food and
Beverages (Japan), Food and Beverages (The Americas), Food and Beverages (Asia and
Basic net income per share (EPS) is computed by dividing net income available to common
Oceania), Food and Beverages (Europe), Pharmaceuticals and Others.
shareholders by the weighted-average number of common shares outstanding for the period.

Diluted net income per share for the years ended March 31, 2013 and 2012, is not disclosed
due to the absence of dilutive securities.

Millions of yen
Thousands of
shares
Net income
Weighted
average shares
Yen
U.S. dollars
EPS
For the year ended March 31, 2013

Basic EPS:
Food and Beverages (Japan) consists of fermented milk drinks, juice and noodles, etc.
Food and Beverages (The Americas) consists of fermented milk drinks, etc.
Food and Beverages (Asia and Oceania) consists of fermented milk drinks, etc.
Food and Beverages (Europe) consists of fermented milk drinks, etc.
Pharmaceuticals consists of anticancer drugs and other pharmaceuticals.
Others consist of cosmetics and professional baseball team operation.
(2) Methods of measurement for the amounts of sales, profit (loss),
Net income available to common

shareholders.........................................
16,379 172,366 95.03
Millions of yen
Thousands of
shares
Yen
Net income
Weighted
average shares
EPS
assets, and other items for each reportable segment
$1.02
The accounting policies of each reportable segment are consistent with those disclosed in Note
2, Summary of Significant Accounting Policies.
(3) Information about sales, profit (loss), assets and other items
is as follows
For the year ended March 31, 2012
Millions of yen
Basic EPS:
Net income available to common
shareholders.........................................
2013
13,292
171,904
77.32
Japan
Europe
Pharmaceuticals
Others
Reconciliation
Consolidated
Sales
Sales to external
customers................... 179,601 38,823 41,251
7,473
37,072 14,973 319,193
Intersegment sales
or transfers.................
12,248
2,463 (14,711)
Total................
191,849
38,823
41,251
7,473
37,072
17,436 (14,711) 319,193
Segment profit (loss)...........
9,547
8,667
9,596
281
8,982
707 (14,712) 23,068
Segment assets..................
174,138
56,247
82,648
7,937
30,323
9,563
77,320 438,176
Other:
Depreciation and
amortization................
12,805
1,580
2,243
323
745
378
1,361 19,435
Amortization of
goodwill......................
49
10
59
Investment in
associates..................
35,435
35,435
Increase in property,
plant and equipment
and intangible assets.....
19,971
4,714
6,716
191
1,512
391
2,829 36,324
NOTE 17 SEGMENT INFORMATION

Under the ASBJ Statement No. 17, Accounting Standard for Segment Information Disclosures
and ASBJ Guidance No. 20, Guidance on Accounting Standard for Segment Information
Disclosures, an entity is required to report financial and descriptive information about its
reportable segments. Reportable segments are operating segments or aggregations of operating
segments that meet specified criteria. Operating segments are components of an entity about
which separate financial information is available and such information is evaluated regularly by
the chief operating decision maker in deciding how to allocate resources and in assessing
performance. Generally, segment information is required to be reported on the same basis as is
used internally for evaluating operating segment performance and deciding how to allocate
resources to operating segments.
(1) Description of reportable segments
Notes: 1. Reconciliation in segment profit (loss) mainly consists of 12,409 million of corporate expense that is not allocated to
each segment.
2. Reconciliation in segment assets mainly consists of 81,283 million of corporate assets that is not allocated to each segment.

3. Reconciliation in depreciation consists of 1,361 million of depreciation of head office.

4. Reconciliation in capital expenditure consists of 2,829 million of capital expenditure of head office.
The Groups reportable segments are those for which separate financial information is available
and regular evaluation by the Companys management is being performed in order to decide
ANNUAL REPORT 2013
Food and Beverages

The
Asia and
Americas
Oceania
50
Millions of yen
2013
2012
Japan
Food and Beverages

The
Asia and
Americas
Oceania
Europe
Pharmaceuticals
Others
Reconciliation
Consolidated
Japan
Food and Beverages

The
Asia and
Americas
Oceania
Europe
Pharmaceuticals
Others
Reconciliation
Consolidated
Sales
Sales to external
39,373 16,174 312,553
customers................... 178,010 39,040 31,953 8,003
Intersegment sales
10,031
2,407 (12,438)
or transfers.................
Total................ 188,041 39,040 31,953
8,003
39,373 18,581 (12,438) 312,553
9,864
8,798
5,527
150
10,145
627 (14,294) 20,817
Segment assets.................. 166,606 49,665 62,582
6,764
36,005
9,955 65,637 397,214
Other:
Depreciation and
11,871
1,597
2,101
346
708
366
1,348 18,337
Amortization of
121
3
92
216
goodwill......................
Investment in
29,871
29,871
associates..................
plant and equipment
18,823
1,422
3,148
249
839
555
1,679 26,715
Sales
Sales to external
customers................... $1,931,199 $417,447 $443,556 $80,351
$398,628 $161,003 $3,432,184
Intersegment sales
or transfers.................
131,697
26,489 $(158,186)
Total................ 2,062,896 417,447 443,556
80,351
398,628 187,492 (158,186) 3,432,184
102,658
93,196 103,182
3,022
96,582
7,602 (158,197) 248,045
Segment assets................. 1,872,447 604,806 888,687
85,340
326,055 102,830 831,403 4,711,568
Other:
Depreciation and
137,687
16,984
24,116
3,477
8,014
4,061
14,634 208,973
Amortization of
goodwill......................
527
107
634
Investment in
associates..................
381,021
381,021
plant and equipment
214,738
50,687
72,211
2,052
16,262
4,207
30,418 390,575
Notes: 1. Reconciliation in segment profit (loss) mainly consists of 12,433 million of corporate expense that is not allocated to
each segment.
2. Reconciliation in segment assets mainly consists of 66,773 million of corporate assets that is not allocated to each segment.

3. Reconciliation in depreciation consists of 1,348 million of depreciation of head office.

4. Reconciliation in capital expenditure consists of 1,679 million of capital expenditure of head office.
Notes: 1. Reconciliation in segment profit (loss) mainly consists of $133,434 thousand of corporate expense that is not allocated
to each segment.
ANNUAL REPORT 2013
51
2. Reconciliation in segment assets mainly consists of $874,012 thousand of corporate assets that is not allocated to
each segment.
3. Reconciliation in depreciation consists of $14,634 thousand of depreciation of head office.
4. Reconciliation in capital expenditure consists of $30,418 thousand of capital expenditure of head office.
(4) Related information

1. Information about geographical areas
b. Property, plant and equipment
a. Sales
Millions of yen
Millions of yen
2013
2013
Japan
The
Americas
Asia and
Oceania
Europe
Japan
Total
229,920 38,823 42,522 7,928 319,193
The
Americas
Japan
2012
Asia and
Oceania
Europe
Japan
Total
229,417 39,040 34,340 9,756 312,553
The
Americas
Japan
Europe
Total
2013
2013
Asia and
Oceania
107,235 8,606 18,763 2,359 136,963

The
Americas
Total
Millions of yen
2012
Europe
111,180 12,610 24,319 2,503 150,612
Millions of yen
The
Americas
Asia and
Oceania
Asia and
Oceania
Europe
Japan
Total
$2,472,263 $417,447 $457,222 $85,252 $3,432,184
52
Asia and
Oceania
Europe
Total
$1,195,484 $135,588 $261,499 $26,915 $1,619,486
Note: Sales are classified in countries or regions based on location of customers.
ANNUAL REPORT 2013
The
Americas
Independent Auditors Report
ANNUAL REPORT 2013
53
lobal Network (As of April 1, 2013)
24
24
21
22 25
23
26
27
16 17
5
20
19
12
3
4
10
11
15 13
14
2
6
7
8
18
9
Principal International Subsidiaries and Affiliates

1 Yakult Honsha Co., Ltd.
10 Yakult (Malaysia) Sdn. Bhd.
20 Yakult U.S.A. Inc.
Yakult Central Institute for

Microbiological Research
11 Yakult Vietnam Co., Ltd.
21 Yakult Europe B.V.
2 Yakult Co., Ltd. (Taiwan)
12 Yakult Danone India Pvt. Ltd.
22 Yakult Nederland B.V.
13 Yakult (China) Co., Ltd.
23 Yakult Belgium S.A./N.V.
14 Guangzhou Yakult Co., Ltd.
24 Yakult UK Ltd.
Ireland Branch
3 Hong Kong Yakult Co., Ltd.

4 Yakult (Thailand) Co., Ltd.
5 Korea Yakult Co., Ltd.
6 Yakult Philippines, Inc.
7 Yakult (Singapore) Pte., Ltd.
8 P.T. Yakult Indonesia Persada
9 Yakult Australia Pty. Ltd.
New Zealand Branch
15 Shanghai Yakult Co., Ltd.

16 Beijing Yakult Co., Ltd.
17 Tianjin Yakult Co., Ltd.
18 Yakult S/A Ind. E. Com. (Brazil)
19 Yakult S.A. de C.V. (Mexico)

ANNUAL REPORT 2013
54
25 Yakult Deutschland GmbH

26 Yakult Oesterreich GmbH
27 Yakult Italia S.R.L.
Yakult Honsha European Research
Center for Microbiology, ESV
orporate Data (As of March 31, 2013)
Corporate Name
Date Founded
1935
Date Incorporated
April 9, 1955
Head Office
1-19, Higashi Shimbashi 1-chome,

Minato-ku, Tokyo 105-8660, Japan
Phone: +81-3-3574-8960
URL: http://www.yakult.co.jp/
March 31
Number of Employees
19,435 (Consolidated)
Yakult Tokyo Sales Co., Ltd.

Yakult Kobe Plant Co., Ltd.
Yakult Corporation Co., Ltd.
Yakult Materials Co., Ltd.
Yakult Health Foods Co., Ltd.
Yakult East Logistics Co., Ltd.
Yakult Kyudan Co., Ltd.
A
B
C
D
E
Hokkaido Branch
East Japan Branch
Metropolitan Branch
Central Japan Branch
West Japan Branch
1
2
3
4
5
6
7
8
Number of
Shareholders 23,342*
* Including shareholders who own shares of
less than one unit
Fukushima Plant
Ibaraki Plant
Shonan Cosmetics Plant
Fuji Susono Plant
Fuji Susono Pharmaceuticals Plant
Hyogo Miki Plant
Saga Plant
Kumamoto Plant
CB
6
E
7
8
SHARE PRICE MOVEMENT

Trading Volume
Yakult Honshas Stock Price (Closing)
(Thousands of shares)
(Yen)
15,000
5,000
Trading Volume (left scale)
Yakult Honshas Stock Price (Closing) (right scale)
12,000
4,000
9,000
3,000
6,000
2,000
3,000
1,000
0 Apr.
2012
May
June
July
Plants
Number of Issued and

Outstanding Shares 175,910,218
Major Subsidiaries in Japan
1 head office, 1 institute, 5 branches, 8 plants

Head Office
Yakult Central Institute for Microbiological
Research
Branches
Paid-in Capital 31,117,654,815

Annual Account
Settlement Date
Offices
Aug.
Sept.
Oct.
Nov.
Dec.
ANNUAL REPORT 2013
Jan.
2013
55
Feb.
Mar.
54 3
D
7
E
7
8
Yakult Honsha Co., Ltd.

1-19, Higashi Shimbashi 1-chome,
Minato-ku, Tokyo 105-8660, Japan
Phone: +81-3-3574-8960
URL: http://www.yakult.co.jp/
1308RV1500
Printed in Japan

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Global Yakult

Entering a New Growth Stage

Dr. Minoru Shirota, successfully strengthened and

The Sources of Yakults Strength

Yakult Consumption around the World /

Message from the Chairman and President

Interview with the Chairman and President

Research & Development

Board of Directors and

In the more than 75 years

* Probiotics: Live microorganisms that provide health benefits

The Sources of Yakults Strength

Yakult has three unique sources of strength:

More than 75 Years of a Global Classic

The Yakult Lady System:

The Wellspring of Future Competitiveness

ANNUAL REPORT 2013

YAKULT HONSHA CO., LTD.

Bifidobacterium breve strain Yakult

Taking Good Health

162 (Thousands of bottles/day)

Per share of common stock:

Notes: 1. Figures are rounded to the nearest million.

ANNUAL REPORT 2013

Sales Volume by Region in 2013

YAKULT HONSHA CO., LTD.

The Americas Asia and Oceania Europe Japan

Net Sales and Operating Margin

0 Net sales (left scale)

0 Net income (left scale)

ANNUAL REPORT 2013

YAKULT HONSHA CO., LTD.

essage from the Chairman and President

ANNUAL REPORT 2013

YAKULT HONSHA CO., LTD.

Opening the door to a new stage for growth

We look forward to showing Yakults growth as it takes a new step forward.

Chairman and Representative Director

President and Representative Director

ANNUAL REPORT 2013

YAKULT HONSHA CO., LTD.

Opening the door

nterview with the Chairman and President

Reflecting on the Fiscal Year Ended March 31, 2013

With a dramatic expansion

Please summarize the business results for the fiscal year

We recorded record-high net sales, while profits also grew significantly.

Although the business environment fluctuated

ANNUAL REPORT 2013

YAKULT HONSHA CO., LTD.

performance to date. In terms of profits, we recorded

increase in depreciation and amortization and a rise in

income. In the pharmaceuticals business, despite a

The Prospect for Business Management (1)

Please discuss measures being taken in the Food and

Let us speak first about the domestic food and

business structures of sales companies. In the retail

ANNUAL REPORT 2013

YAKULT HONSHA CO., LTD.

The annual average number of bottles sold overseas

The Prospect for Business Management (2)

Could you discuss recent initiatives undertaken in the

The core product of our pharmaceuticals business, Elplat,